What are the four distinctive characteristics of services? Intangibility, parishability, inseparability, heterogeneity.

Intangibility= services cannot be easily displayed, communicated, or compared. This means far greater perceived “risk” for the consumer in making a purchase decision. •Challenge: Because of greater risk, all “tangible” bits of evidence become far more significant in making a decision. To reduce risk: ØPay attention to all tangibles (cleanliness of premises, equipment, staff appearance etc.) ØUse guarantees, and/or client testimonials ØAdd tangibility to your service wherever possible. Perishability: Unlike goods, services cannot be stored for a later sale e.g. Once the airplane departs, the value of any empty seat disappears (“perishes”) forever •Challenge: Most services face peaks and troughs in Demand. Therefore, the need to balance Supply & Demand 1.“Smooth” Demand with Differential (flexible) prices - Charge highest in peak times, lowest in off-peak, e.g. Translink off-peak; Cheap Tuesday movie tickets 2.Increase Supply in peak times e.g. hire part-time workers, additional equipment etc. Inseparability (or simultaneity) •Many services are produced and consumed simultaneously e.g. a haircut, or dentist visit. •Challenges: There are limits to how long clients will wait (fast service/process becomes critical) •The service can’t be separated from the service provider: Interpersonal & technical skills are needed •Clients are often ‘co-producers’ of the service and affect the outcome/service quality – clients may need instruction and training. Inseparability (or simultaneity) •Many services are produced and consumed simultaneously e.g. a haircut, or dentist visit. •Challenges: There are limits to how long clients will wait (fast service/process becomes critical) •The service can’t be separated from the service provider: Interpersonal & technical skills are needed •Clients are often ‘co-producers’ of the service and affect the outcome/service quality – clients may need instruction and training. Hetrogenity: •Variations in quality in the delivery of a service, from service visit to service visit, and between different service providers in the same firm •Challenges: Reduce heterogeneity/improve consistency in service quality by: 1.Investing heavily in staff training 2.Developing service delivery systems (e.g. McDonald s) 3.Managing customer expectations