Service and the Characteristics of Service: Intangibility, Inseparability, Variability and Perishability.

Although the services provided by an organization are very diverse, they have accounted for the performance of the organization (Kotler and Keller, 2007). There have been an increasing number in organizations that are selling services (Rotfeld, 2001). Since the early 1980’s, various author have recommended different service types based on different criterion (Chowdhary and Prakash, 2007). Kotler and Keller (2007) defined service as ‘any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything.’ Edvardsson (1998) suggest service to be viewed from the customer perspective as it is them who determines of the quality of the service provided. Service is very important in today context as it is the key for attracting new customers and retaining of existing ones. Bad service experience forces customers to switch the brand or the service provider in search for the one who provides them with satisfaction (Michel et al., 2009). Services often come with product but sometimes its purely only service. Whatever the case, Service excellence help improve the organization performance. Bates et al. (2003) identified that most of the organization strategic focus was on low prices thus reducing the service level and compared with the ones which strategic focus was on service. They found that the organization which strategy focuses on delivering service excellence was more successful. This era is the era of customers and for the success and survival in this competitive market, organizations should emphasize on quality service and this should be integrated into the strategy (Chowdhary and Prakash, 2007).

In times of recession, David Yurman (New York) was offering a glass of champagne to customers who walked into their store (New York Times, 2009). In one way we can see that as a service offered by David Yurman to their existing or potential customers. But David Evans, chairman of Grass Root Group believes consistent well delivered service delivered at a good value to be a good practice than ‘bribery’ (Carroll, 2010).

There are four characteristic of service: Intangibility, Inseparability, Variability and Perishability (Kotler and Keller, 2007). Intangibility means that cannot be seen, tasted, felt, heard or smelled before they are bought thus the customer cannot evaluate it. This causes increase in the uncertainty level and to reduce this factor, customers look for signals of service quality. Customers draw the conclusion of the service from the marketing mix. So it is very important for the service provider to tangibilize the service in order for the service marketers to suggest the quality of their intangible service (Kotler et al., 2005). Santos (2002) argued that even though intangibility is an important characteristic of service, tangibility has more important role in the service sector. ‘Intangibility can be reduced by using strong messages in advertising and publicity in order to support a clear position’ (Davies, 1998). Zeithaml and Bitner (1996) said that intangibility determines if the offering is service or a product however Bowen (1990) argued that intangibility has been over emphasized and it is difficult to understand.

‘The physical evidence of the service production process can be used to communicate service quality attributes and create the service experience.’ Customers evaluate the service during the time the service is delivered to them (Bebko, 2000). Physical evidence and Presentation has been taken into consideration by many service provider companies to demonstrate the service quality, thus reducing the intangibility. Any service provider may organize their physical setting to perceive that they have got quick and efficient service for their customers. Their staff dressed properly and looking to be helpful with a smile on their face would suggest their customer good service. Equipment such as computers and other machines along with communication and symbol would suggest speed and efficiency of the services. The pricing should also be kept simple and clear with no hidden charges for the customers (Langford, 2009). If we consider McDonald, they have clean environment, good layout, proper lighting, god menu displays and the staff uniform are appropriate and this physical evidence has helped position their service in higher level. Intangibility is the main difficulty to marketing health practices (Hyder and Fregidou-Malama, 2009). Healthcare is one of the most intangible services. The customer put their faith on the medical professional. But customer also gets the opinion about the service based on the physical surrounding and the bedside manner of their physician and nurses. Even if the operation was successful carried out in the highest of technical standards, the patience may still be dissatisfied with the service that they have received. Even the least competent Medical professionals could give the patience with high level of satisfaction by paying careful attention to other aspects of the service encounter (Sargeant, 2009).

Inseparability character of service refers to the fact that services are produced and consumed at the same time and that they cannot be separated from their providers, whether the providers are people or machine (Kotler et al., 2005). Inseparability is one of the characters that differentiate services with products because of the simultaneous production and consumption (Sierra and McQuitty, 2005). Kotabe and Murray (2004) found that the inseparability of services performed by pure service providers was significantly higher than of the non pure service providers and argued that because of the technological advancement, some service activities could be made separable. Taher and Basha (2006) stated that the inseparability encouraged the service providers to drop the price on the core service so as to draw traffic into the facility and this created chances for the observant marketers. Edvardsson et al. (2005) argued that inseparability could cause problems more than opportunities for the service providers because of the fact that it introduced uncertainty.

The service employee is a part of the service and so is the customer and they both influence the service that is being offered. That is customer also becomes partly responsible for the service that they receive (Davies, 1998). For example the students present in the class may also be responsible for the efficiency of the lecture given. In a restaurant, all customers are present while an individual customer is getting the service and the behaviour of the other customer can determine the satisfaction of the service delivered to the individual customer. This is the reason why the management should make sure that the customers involved in the service do not interfere with each other satisfaction (Kotler et al., 2005). Inseparability character might become complicated if the customers are not sure about what they need. So the service sector may train their staffs that provide service to help customer articulate their needs to select the appropriate services (Davies, 1998). For example in 1993, 69% of the customers did not know or were not sure about the policies provided by the life assurance industry resulting in the customer taking the wrong policies (Fletcher, 1994 cited in Davies, 1998).

Although inseparability is different among different service providers, customers and service providers are dependent on one another for the success of service provided (Lawler, 2001). Sierra and McQuitty (2005) state that this is the very reason why there is a social exchange between service employees and customers. They found that the social exchange created a sense of shared responsibility. The shared responsibility was positively related with the emotion associated with the service exchange and that the emotion gave the customer with the loyalty felling towards the service firm. So inseparability can lead to brand loyalty for the service provider.

Services are variable and difficult to control. This is because they greatly depend on who provides the service as well as when, where and how they are provided - Variability (Kotler et al., 2005). So the quality control becomes critical and to achieve that, service sector have to hire the right people, standardize the service and monitor the customer satisfaction. The service sector should be very careful while recruiting the service employee. After that, service firm should invest and provide training for the newly hired staff in order for staff to provide good service to their customers. Training helps staffs to develop skills necessary to do their job well in particular service area. Especially the front line staff who comes in direct contact with the customers (Langford, 2009). Rotfeld (2001) discuss about the service employees who says “customer service is not my job!”. He provides an example about software firm where he wanted to get information about new software and an employee says “Oh, you want customer service. That’s not my job.” Also in a restaurant while customers wait for a waiter to come by and take order and a waiter comes by and says that it’s not his table or not his responsibility, how will the customer fell about the service? So it’s very important to hire right staff for the right job and train them.

In restaurants the management gives importance to the food quality but they neglect the impact that front line staffs would cause in their services. They fail to realize that the front line staffs are the ones who would be in direct contact with the customers. Restaurants being a small business ignore to provide training to their staffs because of the cost and resources. One of the other reasons is that mostly services staff are the students who are looking for a part time job and that serving is not their future job but just something to earn living. So the management views them as a short term resources and do not give them the benefit or training. This also gives us the clear picture as to why the part time staffs are less committed to the firms, compromising service standards (Pratten, 2004). The service sector should also standardize the service throughout the organization. Staffs become aware about their responsibility and act accordingly. But standardizing may create a mentality for the staff to not deliver the full potential. The staff may think that if the organization wants this much from me, why should I deliver more? So the service sector should motivate the staff and monitor customer satisfaction. They can monitor the customer satisfaction through surveys and complaint/suggestion system. Financial and non financial rewards motivate the staff to deliver the highest slandered of service (Langford, 2009).

The customer has certain expectation of the quality of the service and the provider determines how the customers perceive quality and there is always a mismatch between these two. It is called as the quality gap. For unsuccessful delivery of the service, the gaps are the difference between customer expectation and management perception of customer expectation, difference between management perceptions of customer expectation and service quality specifications, difference between service quality specification and the service actually delivered and the difference between service delivery and what is communicated about service to customers (Langford, 2009; Auty and Long, 1999).

The behavior of the front line employees is very important in the service sector. Lidén and Skålén (2003) stated ‘It seems important that the front-line employee displays concern for the inconvenience that customers have experienced.’ During their research in RadissonSAS they found that most of the customers were looking for satisfaction and not compensation that the RadissonSAS provided if the customers were not happy about any of their services. The customers were happy with the way the front line employees apologized and treated them after complaining about certain service. His research also showed how an honest apology pleased the customers more than a refund. The front line employees can turn a negative critical incident into an improved relationship. For some incident in RadissonSAS, customer complained that the front line employee didn’t handle the incident properly which created negative customer relationship. But in most of the cases the front line employees helped create neutral or even positive customer relationship when there was a critical incident (fault of management). The interviews show how the customer relationship can be maintained by the behavior of the front line personnel. The front line employees have to be empathic, responsive, and apologetic depending on the circumstances and in order to be so; the management should hire the right kind of people for the job and provide them with good training (Lidén and Skålén, 2003).

One of the other major characteristics of service is that they cannot be stored for later use or sale - Perishability. When the demand is steady, then service Perishability is not a problem but the service sector face a huge problem when the demand fluctuates (Kotler et al., 2005). If a flight takes off then the airline cannot sell the tickets for that flight. In some cases the service value exists only at certain point and then disappears and the unused service cannot be stored. This is the reason why the service providers charge customers for missed appointments. Because of the problem arising from the demand fluctuation, capacity/demand management becomes critical. Service sector could use the demand side strategy and/or supply side strategy. On the demand side, service sector could charge different price for different period of time depending on the demand. This will help to attract some customers in the off peak time. Complementary services and discount also comes in the demand side. On the supply side, service sector can hire part-time staffs in the peak hours or time period. To increase the peak time efficiency, the service sector can reschedule work. Not only that they could share the service when required or whenever possible and also plan ahead for future expansion (Langford, 2009).

With the inability to store the services, this is a critical feature which can cause customer to wait for a long time or can cause customer not to be served at all. Just in time concepts and techniques is applicable to the service sectors too as they are the process (Canel et al., 2000). Process also becomes very important while delivering the service. Process is how the customers are treated at the place where they receive the service or where they encounter the service. ‘It involves the process of transaction including ease of payment.’ For example what is the speed at which customers can be served? How many can be served at the same time (Davies, 1998)? Because of Perishability, the application of just in time becomes more successful in service sector. Just in time supports the characteristics of services and help the service firm improve their performance measure. Just in time will help in the service sector making possible the accomplishment of benefits for them. This will simplify the process, reduce inventories of supplies and focus on quality of service being produced (Canel et al., 2000).

‘Pre-purchase evaluation of service characteristics by consumers, as well as their production and marketing by providers, is said to differ from products because of intangibility, variability, inseparability and Perishability.’ Bebko (2000) argued that the service sector needed to understand the effect of intangibility better for understanding the customer experience and providing better service to them and it is the intangibility that is most likely the reason for the other characteristics of services. So it is highly recommended for the management to understand the effects of intangibility on consumer expectations for service quality. The management should closely look at the seven marketing mix of the services described above. They should select the physical attribute carefully while making the price simple and clear to their customers. The management should create a culture so that the staffs have a clear vision on what role they play in creating loyal customers (Sierra and McQuitty, 2005). The management should also look at the possible quality gaps and identify solutions to fill it. The management also should take into consideration about the globalization and keep in mind that the same service element will be perceived differently in different culture (Hyder and Fregidou-Malama, 2009). Management should carefully choose the demand side and supply side to manage the service effectively and efficiently. The management should keep in mind that their front line staffs are the ones who will be in direct contact with the customers. Thus they should hire the right people and provide them with training which will help them deliver quality service. Management should standardize the service, provide the front line staffs with full information about what they are supposed to do and how they should behave in their job and also motivate them to deliver the best service.

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