Question 1: What are services? Explain their distinct characteristics.
Answer:
Services: “Services are defined as those which separately identifiable, essential and intangible activities that provides and want satisfaction and are not necessarily tied to the sale of a useful product or another service. Characteristics of services are as follows:
1. Intangibility: The most determining feature of a service that it is intangible. It has no shape, size or other physical dimensions. Intangible nature of services has much implication like:
a) A service cannot be routed.
b) Precise standardization is not possible.
c) A service cannot be patented
d) There is no transfer of ownership.
e) There are no inventories.
2. Irreparability: In most of the cases, a service cannot be separated from the person who sells. For example, an electrician has to be physically present to provide the services which is required. Therefore, production and consumption of services are non- separable. This is in sharp contrast to the products that can be produced and stored for sale in future.
3. Perishability: Services cannot be produced before the sale and conserved for future demand. An empty seat in an aircraft, a spare birth in a train and an unsold seat in a cinema hall represent a service capacity which is least forever. Thus, service are not fully used which represents a total loss.
4. Heterogeneity: Since the human being element serves dominant in rendering services, it is almost impossible to standardize the quality of services. Two waiters in a restaurant or two clerks in a bank hardly provides the same quality of service. Even the same provider may not provide same service. The doctor who gave you complete satisfaction on your first visit may behave different on you next meeting. This is the fact that rules and procedures have been laid down to ensure the maximum efficiency.
5. Ownership: when you buy any product e.g. a shirt or a book you become its owner after buying. But when you buy a service e.g. a seat in an aircraft, you do not become its owner. In case of services, the payment is not for but only for the utility of the facilities. A service purchase is but purchased only for the use the benefit it provides.
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