Services are economic activities delivered from one part to another, usually involving time-based performance to bring about the desired results in the goods and other assets of the recipients or buyers.
Generally. In exchange for their time, money and effort, service customers expect value from access to products, skills, networks, systems, labor, and facilities. Generally, it does not take ownership of any physical entities or components.
For example: Service sectors include: commerce, transportation and storage, railways, real estate, hotels and restaurants, security, social services, insurance and bank mail, telecommunications.
Characteristics of Services:
There are characteristics of services that are different from a product (firm good).
Ambiguity – Services are obnoxious offerings. A buyer cannot see, hear, feel or taste it unless they buy a service. The person who pays for the massage cannot see the effects of massage on his/her body while massaging. Anyone who wants to travel overseas by plane must buy a ticket for the airline, as well as enjoy the flight. They are looking for signs and evidence for the quality of the service, as the buyer may not feel the service beforehand. Decision making is based on information received from the presentation, tools or equipment, location, message (communication content and material), symbols, people, and price.
Incompatibility – There is no separation of service and buyer provided. It does not apply because the products are made, stored elsewhere, and delivered when needed. An item like a sandwich can be bought and consumed after an hour, but service is created and consumed simultaneously. For example, a barber should be able to offer his services for a haircut. Similarly, a physician offers his services only when visiting a patient. There are limitations due to this. You can buy a large number of items from different places like retail stores. But both a service provider and a service buyer must have a service sale. To overcome these limitations, service providers meet a large number of customers simultaneously or train their representatives to deliver the same service to multiple individuals.
Diversity – This is another characteristic of services that differ from tangible products. The manner in which a service is provided varies depending on the service provider, which is time and location. For example, the entertainment show of two different artists will be different.
Also, the service offered by the same provider cannot be standardized. For example, a second flight from the same airline may not provide the same experience a person received during the first flight. A barber may not offer a standard haircut to all persons, depending on the customer’s time constraints. Etc. Service providers take steps to standardize the service offered to increase sales and customer satisfaction. Big service providers invest in an airline to train employees and hire the right people. Some standards have been set on the quality expected of employees. Similarly, customer satisfaction surveys are done to continuously improve the service.
Perishability – Services cannot store, return or resell as a tangible product. The buyer cannot save the massage experience purchased from a service provider. To enjoy it again, you have to buy the service again. Similarly, in the event of a bad experience, a dissatisfied person will not be able to return his / her service. If a service is not used, the service provider will lose.
Un-sold air tickets, empty-room hotels, a movie show with empty seats will be lost forever. The service provider will generally do good business in times of high demand. To cope with this, you can lower prices and provide complementary services when there is less demand. Apart from best efforts to standardize a service by a service provider, there are always subtle differences in the level of service provided.
Proprietary and Non-Transferable – A product such as a television is owned by a fire product and transferred to another owner. But owning a haircut service purchased from a barber cannot be transferred to another buyer.
Quality attributes are difficult to quantify – Quality attributes with a service are more difficult to put in the form of data for analysis compared to a product. A qualitative expert can analyze the physical properties of an object in a laboratory and make observations. But in the case of disgusting service in nature, quantifying the quality of its properties is complicated. Take the example of a quality assessment of a registered phone call with a customer service agent. Two different quality analysts will rate the customer representative differently if they are not well-trained professionals. Companies try to set standards to maintain the quality of service to ensure business success.
Also read: Concept of Production Management, Importance of Production management, Qualities of Production Manager, Concept of Entrepreneurship, Types of Entrepreneur, Process of Entrepreneurship, Need of Entrepreneurs, Barriers to Entrepreneurship