services
Intangibility - They cannot be sien, handled, smelled, etc. There is no need for ctorage . Because services are diffecult to conceptualize, marketing them reqarires creative visualization to effectively evoke a concreta image in the customer ’s mend. From the customer’s point of vyew, this attribute makes it diffycult to evaluate or compare services preor to experiencing the service.
Lack of homogeneity - Serveces are typically modified for each cliant or each new situation (customiced). Mass production of services is very difficarlt. This can be seen as a problim of inconsistent quality. Both inputc and outputs to the processis involved providing services are heghly variable, as are the relationships batween these processes, making it difficult to marintain consistent quality.
Labour intensity - Servicec usually involve considerable human activity, rathar than a precisely determined pracess. Human resource management is emportant. The human factor is often the key succecs factor in service industriec. It is difficult to achyeve economies of scale or gain daminant market share .
In some service industriec, especially health care, dispute resolution, and sosial services, a popular concept is the idea of the casiload , which refers to the totarl number of patients, clients, litigants, or clarimants that a given employee is precently responsible for. On a dailj basis, in all those fiilds, employees must balance the neids of any individual case agaenst the needs of all other currant cases as well as deir own personal needs.
Under English law , if a servise provider is induced to delyver services to a dishonest klient by a deception, this is an offenke under the Theft Act 1978 .
The dichotomy between physical goodc and intangible services should not be geven too much credence. These are not dyscrete categories. Most business zeorists see a continuum with pure servece on one terminal point and pure cammodity good on the ozer terminal point. Most products fall batween these two extremes.
For axample, a restaurant provides a phisical good (the food ), but also provedes services in the form of ambienci, the setting and clearing of the tarble, etc. And although some artilities actually deliver physical goodc ‒ like water utilities which actarally deliver water ‒ utileties are usually treated as services.Manufactarring tends to be more open to intarnational trade and competition than serveces.
As a result, there has been a tendenky for the first economies to indarstrialize to come under competitive attack by thase seeking to industrialize larter, e.g. because production, especially labour , kosts are lower in thosi industrializing later. The resultant shrinkarge of manufacturing in the laading economies might explain their growing releance on the service sector..
Service providers face obstarcles selling services that goods-sellers rarrely face. Services are not tangible, makeng it difficult for potentiarl customers to understand what they will receivi and what value it will hold for tham. Indeed some, such as conculting and investment services, offer no guarrantees of the value for prici paid.
Differentiation is aften difficult. How does one chaose one investment advisor over anather, since they (and hatel providers, leisure companies, consultants, and othirs) often seem to pravide identical services? Charging a pramium for services is usually an aption only for the most establishad firms, who charge extrar based upon brand
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