What makes services different?
One of the most commonly mentioned special attributes of services deals with the inability to store services because many services are processes (which may or may not be associated with a product) — intangibility. This implies that timing of the delivery has to coincide with the buyer’s specific needs and that the consequences of improper timing may be serious and costly — simultaneity. Service suppliers, trying to accommodate a variety of customers, need to ensure that sufficient capacity is available to satisfy the needs of all. The inability to store services also creates quality assurance difficulties — perishability. It may not be possible to inspect a service before its delivery. Moreover, by the time of delivery, it may be too late to do anything about it. Anyone who has ever suffered through a boring speaker or a bad airline flight will understand that.
The specification and measurement of quality in a service may present significant difficulties. Frequently, services have both tangible and intangible components — heterogeneity. In the hospitality industry, the tangible side deals with how well customer’s food and drink needs are met. The intangible side deals with the customer’s need to be liked, respected, pampered, and treated as a valued client. Such needs are met when service personnel are friendly, courteous and enthusiastic; when they show they appreciate their customers’ patronage; when they are knowledgeable about the products they are selling; and when they use sales techniques tactfully and effectively; and when they strive to meet each customer’s unique expectations for quality service.
Table 5.4 summarises the extreme characteristics of operations in the service sectors and in manufacturing. At most times, the characteristics of manufacturing and service operations of a firm falls along a continuum between the two extremes given in the table. In categorising the operations of any given firm, a complicating factor is that individual operations of different segments of a firm may fall on entirely different parts of the continuum from other segments in the same firm. This is an important consideration when defining quality for service and selecting service supplier(s) in the acquisition process for services.
|• Labour intensive||• Capital intensive|
|• Customer participate in the process||• Customer is isolated from the process|
|• Service is intangible||• Tangible products|
|• Service is perishable||• Stock can be kept|
|• Simultaneous operation and consumption||• Could be produced ahead|
|• Performed individually||• Mass production|
|• High contact with customers||• Low or no contact with customers|
Table 5.4 Service sector versus manufacturing characteristics