Question

Describe the term service intangibility.

Explain the possible effects of intangibility on service buying behavior and discuss possible strategies of overcoming intangibility using services 7Ps.

Support your answer with illustrative examples.

Answer 1

Service intangibility means that generally many services that a consumer avail are not tangible i.e. they lack physical attributes and existence due to which the consumers are unable to assess the value or the utility that they will achieve achieve from engaging in such a service. Services effectiveness can be experienced or felt and it can be done only after consumption which is not in the case of tangible goods.. For example when you decide to watch a movie you have no idea how much value will it give it to you.

The effects of intangibility on service buying behavior includes - people think too much before consuming the service, research and listen to the review before availing the service, often reply on only where the brand image is high and only rely on their existing service providers where they had better experience.

The 7 P's include -
Product: Customizing the service as per customer requirements can lead to a better impact. The offering should be a mix of standardization to ensure quality along with customization to give better service.

Pricing: The price for the service is difficult to calculate and it should be estimated by including a mark up for an adequate profit margin along with the cost of raw materials and factor services used. Price should be in relation to the worth provided so that customer doesn't feel burdened. The price of a foot massage should be as per the worth a customer gets from it.

Place: The location of the service product assumes importance as it can't be separated from the service provider. A good location adds to the experience of the customer.For example, a holiday resort is better situated in the countryside facing lake view away from the rush and noise of a city.

Promotion: Effective promotion is differentiating a service offering in the mind of the consumer from others and eliminating their fears of availing the service. Thus, service providers offering identical services such as airlines invest heavily in advertising their services and showcasing their strengths to attract customers.

People: People are a defining factor in a service delivery process, as it is provided by the provider. Thus having trained staff gets more customers. Consequently,popular dinning restaurants are known because of their chef and courteous staff.

Process: Service delivery process is crucial as the same standard of service is repeatedly delivered to the customers and as a result there is service blue print as to how to begin and end which provides the details of the service delivery process.

Physical Evidence: Most service providers strive to incorporate certain tangible elements as there is intangibility in service and this is done into their offering to enhance customer experience so that it can be measured in terms of satisfaction. Which is why restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests.