Services and Goods

Intangibility is a key determinant whether an offering is a service or not. Services are more intangible than manufactured products. However, some services may have components of tangibility and some goods may have some components like intangibility.

Services are intangible because they are performances and can just be felt rather than being touched or seen. Goods on one hand are first produced, then sold and then consumed whole while on the other hand services are first sold, then produced and then consumed.

Services are heterogeneous and can vary differently. Services are imperishable too as it cannot be saved.

Intangibility is one of the keys to differentiate between a service and a good. A good is tangible, however, a service is intangible. One can feel, see and touch the good but services can only be felt. They as such are intangible. Some marketing problems are faced due to intangibility:

Lack of ability to be stored: Because of their intangibility, services cannot be inventoried. As a result, supplies of services cannot be stored as buffers against periods of high demands. Consequently, customers are commonly forced to wait for desired services, and service providers are limited in how much they can produce. The bottom line is that the inability to maintain an inventory translates into constant supply and demand problems.

Lack of protection by patents: Because of the property of intangibility, services are not patentable. Consequently, it is difficult to maintain a firm's differential service advantage over attentive competitors for long periods.

Difficulty in displaying or communicating services: The promotion of services presents yet another set of special challenges to the service marketer. The root of the challenge is: How to get your customers to take notice of your product when they cannot see it.

Some possible solutions to these problems could be:

• The use of tangible clues

• The use of personal sources of information

• Creation of a strong organizational brand image

 
Inseparability refers to:

• The service provider's physical connection to the service being provided

• The customer's involvement in the service production process

• The involvement of other customers in the service production process.

Some marketing problems are caused by inseparability:

Physical connection of the service provider to the service: Face-to face interactions with customers make employee satisfaction crucial. Without a doubt, employee satisfaction and customer satisfaction are directly related. Dissatisfied employers who are visible to customers will translate into lower consumer perception of the firm's performance. Customers will never be the number one priority in a company where employees are treated poorly. Employers should be viewed and treated as internal customers.