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In common parlance, it is understood that service
is something that cannot be touched or seen, i.e., it is something which
is not tangible. According to Kotler, "A service is any activity or
benefit that one party can offer to another that is essentially intangible
and does not result in ownership of anything; the product may or
may not be tied to it." Services are really wide in nature and even
advertising is also a service. There are specific differences between goods
and services, as shown in Box 1. No ownership is transferred when
any service is rendered. It is only the experience which gets
transferred. If one buys an `Omni' model from Maruti Udyog Limited, he
becomes a car's owner but if one utilizes the services of a cab, he has nothing
to do with the cab once he reaches his destination and payment is
made. While the goods are for use, services are only to experience. Services
are the outcome of performance of the service providers. If the
purchased goods are defective, they can be replaced. The same is not the
case with services. Products have a shelf-life and thus can be
inventoried. Services cannot be delivered in the absence of services provider
and thus cannot be inventoried. If you purchase a Wagon R Duo
model from Jaipur or Mumbai or Jammu, the product remains the same as
far as its features and standard performance are
concerned. However, in the case of services, there cannot be uniformity
in either the inputs or the output.
The higher involvement of the
human element in delivering services makes it difficult to standardize the
inputs and outputs. Due to the same reason, complete mechanization
of products is possible while only limited mechanization is possible
in case of services and is not possible in case of pure services. There
is difference between a machine and human being.
Limited mechanization also puts a limit on standardization. It is important
to note that the categorization of services is also difficult.
The segments may run into many sub-segments, which may be too
small to operate. With complexity in categorization,
customization becomes simple and effective. Services can be delivered
tailor-made to cater to the needs of individuals with different
choices. This is less possible in case of products. More interesting point
to note is that since the services are intangible and cannot
be inventoried, fluctuations in demand are manageable.
Though these fluctuations affect revenue generation, greater loss is
incurred due to the waiting time, unlike in the case of manufacturing of
goods, where different kinds of costs are involved and fluctuations
could result in severe losses if they are not managed properly. These
differences in goods and services influence almost all activities related to
their marketing. Intangibility aspect being more prominent in
services, it affects all processes related to the marketing of services
including their advertising. |
