MSG Team's other articles

12506 Brand Identity – Definition and Concept

Brand identity stems from an organization, i.e., an organization is responsible for creating a distinguished product with unique characteristics. It is how an organization seeks to identify itself. It represents how an organization wants to be perceived in the market. An organization communicates its identity to the consumers through its branding and marketing strategies. A […]

12951 Cost/Price Sensitivity of Customers

Price sensitivity can be defined as the consciousness of the customers to cost windows or range within which they make dealings. All the customers are always cost sensitive and concentrate basically to buy products on cheap rates. However, cost sensitivity of a customer substantially depends on condition of the market. For example if a product […]

9810 Implementing Integrated Marketing Communication Plan

Integrated marketing communication plan blends essential components of marketing mix to promote brands effectively among end-users. Integrated marketing communication plan integrates various methods of marketing such as advertising, public relation, promotion through social networking sites and so on to create awareness of products and services among target audience. Brand communication methods instead of being used […]

10684 Practicing Socially Responsible Practices Internally

In previous articles, we have seen how companies need to adopt CSR as a business need and imperative. The role of media and advocacy groups was discussed as well. In this article, we turn to a crucial but often neglected aspect of a company’s social responsibility i.e. the need to be socially conscious with its […]

9710 How to Maintain Competitive Edge in Service Industry

In the present times, doing business has become an extremely competitive game. This is true not only for the product industry but to the service industries as well. In case of service industry, the competition to be at the top and be the market leader is tougher simply because of the fact that service is […]

Search with tags

  • No tags available.

Introduction

The world economy nowadays is increasingly characterized as a service economy. This is primarily due to the increasing importance and share of the service sector in the economies of most developed and developing countries.

In fact, the growth of the service sector has long been considered as indicative of a country’s economic progress.

Economic history tells us that all developing nations have invariably experienced a shift from agriculture to industry and then to the service sector as the main stay of the economy.

This shift has also brought about a change in the definition of goods and services themselves. No longer are goods considered separate from services. Rather, services now increasingly represent an integral part of the product and this interconnectedness of goods and services is represented on a goods-services continuum.

Definition and characteristics of Services

The American Marketing Association defines services as - “Activities, benefits and satisfactions which are offered for sale or are provided in connection with the sale of goods.”

The defining characteristics of a service are:

Intangibility: Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product.

Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering.

  1. Heterogeneity/Variability: Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider.

    While products can be mass produced and be homogenous the same is not true of services. eg: All burgers of a particular flavor at McDonalds are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers.

  2. Perishability: Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. eg: A customer dissatisfied with the services of a barber cannot return the service of the haircut that was rendered to him. At the most he may decide not to visit that particular barber in the future.

  3. Inseparability/Simultaneity of production and consumption: This refers to the fact that services are generated and consumed within the same time frame. Eg: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase.

    Moreover, it is very difficult to separate a service from the service provider. Eg: the barber is necessarily a part of the service of a haircut that he is delivering to his customer.

Types of Services

  1. Core Services: A service that is the primary purpose of the transaction. Eg: a haircut or the services of lawyer or teacher.

  2. Supplementary Services: Services that are rendered as a corollary to the sale of a tangible product. Eg: Home delivery options offered by restaurants above a minimum bill value.

Difference between Goods and Services

Given below are the fundamental differences between physical goods and services:

GoodsServices
A physical commodityA process or activity
TangibleIntangible
HomogenousHeterogeneous
Production and distribution are separation from their consumptionProduction, distribution and consumption are simultaneous processes
Can be storedCannot be stored
Transfer of ownership is possibleTransfer of ownership is not possible

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

Customers Expectations and Delight

MSG Team

The Changing Face of Services Marketing

MSG Team

Is Automation Making Customer Service Better or Worse?

MSG Team