What are the 5 main characteristics that differentiate services from products?

A product is a tangible good that a customer can see, touch, feel, try on, taste or otherwise use. It can be measured and counted where as a service is intangible -- something a customer experiences but doesn't hold or retain. It is less concrete and is the result of the application of skills and expertise towards an identified need. At either extreme of the business world, you have companies that are entirely product sellers and companies that market only services.

The characteristics that differentiate the two are as follows: 

1) Tangibility

As already mentioned, a product is tangible. Items such as packaging and presentation may compel a customer to purchase a product. Services, on the other hand, are not tangible, which can make them more difficult to promote and sell than a product.

2) Relationship and Value

Products tend to fill a customer's need or want, so companies can use this to sell a product. A service is more about selling a relationship and the value of the relationship between the buyer and seller of the service. For example, a car is something a buyer can touch and see as well as use. A service, such as lifestyle coaching, for example, is not tangible. Therefore, the client needs to perceive the value of the service, which can be harder to get across. 

3) One Versus Many

Marketing products tends to involve multiple products that make up the line. For example, cleaning product manufacturers tend to market not just one cleaning product. Instead, they have a line of cleaning products to serve the various needs of their customers. Services, on the other hand, typically have a single option. It can be harder to promote and sell the reputation of one single service over the benefits of many different products.

4) Comparing Quality

Measuring the quality of a product is easier than measuring that of a service. If a customer buys a cleaning product to clean the kitchen sink and it doesn’t do the job, the customer knows the value of the product is zero. On the other hand, it is harder to measure the quality of a service. 

5) Return Factor - If a customer purchases a product and it doesn’t work as it is supposed to, the customer can return the product for her money back or at least to receive a store credit. A service is consumed as it is offered, so it lacks the return factor that a product has. Some service providers overcome this by offering money-back guarantees.

I am sure you are aware of the marketing mix for product marketing - the4Ps. Product, Price, Promotion and Place. When it comes to service, there are7Ps to market a service. The first four are the same as the traditional marketing mix and the three additional Ps are People, Process and Physical evidence. 

People

People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. Consequently, customer service training for staff has become a top priority for many organizations today.

Process

The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blueprint which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff.

Physical Evidence

Since services are intangible in nature, most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. For eg. Many restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests 

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According to this article, you could get marketing assignment help to implement in the further development of the growth pf service markets.

In our last post, we discussed “How you can Successfully Market your Services“. Today, we are going to examine the 5 major unique characteristics of services or classification of services in service marketing which are;

• Perishability,  
• Intangibility,  
• Variability,  
• Inseparably and
• Non-ownership

Perishability

Perhaps of all the suggested special characteristics of service products or classification of services, this is one of the most difficult to appreciate. Why? Services are highly perishable compared to physical products. But how could, for example, the services of say, an airline be considered to be more perishable than, say, fresh food and vegetable products?

The reason is that, unlike most physical products, many services cannot be stored. For example, if an airline does not sell all the seats on a particular flight, then those seats, or rather the sales revenue of filling of them would have carried, has immediately and irreversibly gone.

Intangibility

Physical products in the store are widely displayed for customers to see, feel, touch, weigh, or sniff at before deciding whether or not to buy.

Comparing this with the choice of the service of say, an insurance policy. You cannot touch, see or smell the products before choosing, although clearly, you can make some assessment based on past experience, word of mouth, or even the location and decor of the insurance office. The intangible nature of most services gives rise to special problems both for suppliers and consumers.

Variability

In the production and marketing of physical products, companies have increasingly paid special attention to ensuring consistency in quality, feature, packaging, and so on.

More often than not all customers can be sure that every bottle of Coke he/she buys, even in a lifetime of purchases, will not vary. The provision of services, however, invariably includes a large measure of the “human element”

Indeed, with many services, we are purchasing nothing else but the skills of the suppliers. Because of this, it is often very difficult for both supplier and consumer to ensure a consistent “product” or quality of service.

Inseparability

A key distinguishing feature of service marketing is that the service provision and provider are inseparable from the service consumption and consumer.

For example, we cannot take a hotel room home for consumption; we must “consume” this service at the point of provision. Similarly, the hairdresser needs to be physically present for this service to be consumed.

This has implications both for channels of distribution and scale of operations.

Non-ownership

The final distinguishing feature of a service is that, unlike a physical product, the consumer does not secure ownership of the service. Rather the customer pays only to secure access to or use of the service.

Again the hotel room is a good example. Similarly, with banking services, although the customer may be given a Cheque book, credit cards, etc, they serve only to allow the customer to make use of what he or she is actually buying, namely, bank services.

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Services have five specific characteristics. If your business sells services you need to take account of each of the characteristics in all aspects of your marketing. Service characteristics need to be considered at each stage of the marketing process, from service design through to service sales and service delivery.

This article examines each of the five characteristics of a service and looks at how the traditional marketing mix (4Ps - Product, Price, Place, and Promotion) can be adapted to market a service (Known as the Service Marketing Mix or the 7Ps - Product, Price, Place, Promotion, People, Process and Physical Evidence).

The diagram below captures the five essential characteristics of a service which need to be taken into account for service marketing; lack of ownership, intangibility, inseparability, perishability, and heterogeneity/variability.

Services have five essential characteristics.

• Lack of ownership
• Intangibility
• Inseparability
• Perishability
• Heterogeneity or Variability

You can not own a service and you can not store a service like you can store a product. Services are used or hired for a period of time. For example when you buy an aeroplane ticket to fly to the USA, you are buying a service which will start at the beginning of the flight and finish at the end of the flight. You can not take the aeroplane flight home with you.

Service Marketing Characteristic - Intangibility

You cannot hold or touch a service unlike a product. This is because a service is something customers experience and experiences are not physical products.

Service Marketing Characteristic - Inseparability

Services cannot be separated from service providers. A product can be taken away from the producer but a service can not be taken away as it involves the service provider or its representatives doing something for the customer. For example a company selling ironing services needs the company to iron the clothes for you.

Services last a specific time and cannot be stored like a product for later use. For example an interior designer will design a property once. If you would like to redesign the house you will need to purchase the service again.

Service Marketing Characteristic - Heterogeneity/Variability

Firms have systems and procedures to ensure that they provide a consistent service but it is very difficult to make each service experience identical. For example two identical plane journeys may feel different to the passengers due to circumstances beyond the airline's control such as weather conditions or other passengers on the plane.

Next page: Service Marketing Mix