Question

In: Economics

5. Critically assess the five (5) characteristics that distinguish services from tangible goods.

5. Critically assess the five (5) characteristics that distinguish services
from tangible goods.

Solutions

Expert Solution

Characteristics of Services

In the following, we will go into the most relevant characteristics of services. Characteristics of services apply universally to any service. The most important characteristics of services are:

  • Lack of ownership
  • Intangibility
  • Inseparability
  • Variability
  • Perishability
  • User participation

Lack of Ownership – Characteristics of Services

Lack of ownership may be one of the most obvious ones of the characteristics of service. It refers to the fact that you cannot own and store a service like you can a product. This characteristic is strongly linked to several other characteristics of services, such as intangibility, perishability, inseparability.

Intangibility – Characteristics of Services

When thinking about the characteristics of services, intangibility may come to your mind first. Service intangibility means that services cannot be seen, tasted, felt, heard or smelled before they are bought. You cannot try them out. For instance, airline passengers have nothing but a ticket and a promise that they will arrive at a certain time at a certain destination. But there is nothing that can be touched.

Inseparability – Characteristics of Services

Characteristics of services include inseparability, which means that services are produced and consumed at the same time. This also entails that services cannot be separated from their providers. Contrary to services, physical goods are produced, then stored, later sold, and even later consumed. Services are first sold, then produced and consumed at exactly the same time. A product can, after production, be taken away from the producer. However, a service is produced at or near the point of purchase. For instance, when visiting a restaurant, you order your meal, the waiting and delivery of the meal, the service provided by the waiter/ress etc. All these parts, including the providers, are part of the service and therefore inseparable. In services marketing, a service provider is the product.

Variability – Characteristics of Services

Variability does also belong to the important characteristics of services. It refers to the fact that the quality of services can vary greatly, depending on who provides them and when, where and how. Because of the labour-intensive nature of services, there is a great deal of difference in the quality of service provided by various providers, or even by the same providers at different times.

Perishability – Characteristics of Services

Perishability means that services cannot be stored for later sale or use. In other words, services cannot be inventoried. This is one of the most significant characteristics of services, since it may have a major impact on financial results. Doctors or dentists often charge patients for missed appointments because the service value has foregone. The value existed only at that particular point and disappeared when the patient did not come. When demand is steady, the perishability of services is not a problem. However, in case of fluctuating demand, service firms can have difficult problems. For this reason, transport companies own much more equipment than they would if demand were even throughout the day: the demand during rush-hours needs to be served at that specific time, it cannot be served later or earlier. Consequently, service companies use various techniques for creating a better match between demand and supply: Demand shifting.

User participation – Characteristics of Services

Finally, the characteristics of services include user participation. Indeed, users participate in every service production. Even when the user is not required to be at a location where the service is performed, users participate in every service production. A service cannot be separated from its provider, but neither can it be separated from its user.

Please rate my answer.


Related Solutions

Identify five (5) characteristics that distinguish a corporation from proprietorships and partnerships
Identify five (5) characteristics that distinguish a corporation from proprietorships and partnerships
Give five examples of organizational forms used to produce goods and services. What tax characteristics distinguish...
Give five examples of organizational forms used to produce goods and services. What tax characteristics distinguish one from the other?
2. Discuss 4 characteristics of services that distinguish them from products. Illustrate each with a marketing...
2. Discuss 4 characteristics of services that distinguish them from products. Illustrate each with a marketing example. 3. What does relationship marketing in services involve. Illustrate with a marketing example. 4. What do we mean by internal marketing in services?
describe the characteristics of services and how they differ from goods. After reviewing these differences, including...
describe the characteristics of services and how they differ from goods. After reviewing these differences, including the expanded service marketing mix, prepare a new discussion thread addressing the following: a)   What do you see as the greatest challenge in providing quality service and why? b)   What do you see as the easiest difference to address and why?
Create a list and rank the following products/services using intangibility. The list will rank tangible goods...
Create a list and rank the following products/services using intangibility. The list will rank tangible goods at the top and totally intangible services at the bottom. Briefly explain each category as well. Products/Services Blue Jeans Car Dental Examination Meal at a Nice Restaurant Golf Lessons Haircut Hotel Room Houseplant Ice Cream Cone Jewelry Laundry Detergent "Lean Cuisine" Dinner Running Shoes TV Repair Vacation Package
Since consumers' utility depends on their income and prices of goods and services, critically analyze the...
Since consumers' utility depends on their income and prices of goods and services, critically analyze the theoretical notion that a general income tax or subsidy to individuals generates higher utility maximization than the same tax or subsidy on specific products or services.
Consider a PPF which illustrates the trade-off between tangible goods and intangible services. If technological improvements...
Consider a PPF which illustrates the trade-off between tangible goods and intangible services. If technological improvements raise productivity in the tangible good sector but not in the intangible service sector, A-The opportunity cost of intangible services goes up. B-The opportunity cost of tangible goods goes up. C-The opportunity cost of the two goods does not change Suppose that different ways of organizing a society produce different levels of income for two different groups of citizens, natives and newbies. Both groups...
What key characteristics distinguish a professional from otherkinds of workers, and is an IT worker...
What key characteristics distinguish a professional from other kinds of workers, and is an IT worker considered a professional? What factors are transforming the professional services industry? What relationships must an IT worker manage, and what key ethical issues can arise in each? ▪ How do codes of ethics, professional organizations, certification, and licensing affect the ethical behavior of IT professionals? ▪ What is meant by compliance, and how does it help promote the right behaviors and discourage undesirable ones?
5. In general, efficiency will be maximized if all goods and services are taxed at the...
5. In general, efficiency will be maximized if all goods and services are taxed at the same rate. Is this true? Discuss. a. What is the major difficulty with taxing all commodities at the same rate in practice? b. Given that a uniform tax on all goods and services is not possible, a friend suggests taxing all remaining commodities at the same rate, because “that is the next best thing to the most efficient outcome.” Is this suggestion economically valid?...
Question 1 (a):   Distinguish the five types of teams.   Question 1(b): Identify and discuss team characteristics....
Question 1 (a):   Distinguish the five types of teams.   Question 1(b): Identify and discuss team characteristics. Question 2(a):   Identify and discuss the various types of sales promotion. Question 2(b): Identify and discuss the important objectives of promotion. Question 3:  Discuss the various types of Advertising. Question 4: Discuss in detail the pricing strategies. Question 5: Discuss in detail the role of logistics in the supply chain. Question 6:   Write a detailed discussion of distribution channels using marketing intermediaries.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT