Question

In: Operations Management

Your friend George is going to start a new business servicing and repairing cell phones. He...

Your friend George is going to start a new business servicing and repairing cell phones. He asks you what is the difference in characteristics of a service business over manufacturing a product. Name and describe the four characteristics of services using his business as an example (often referred to as the 4I’s of service). Explain to him why this makes it a bit harder to market.

Solutions

Expert Solution

The four characteristics of services or 4I's if the service includes the following:

1. inventory- It can be said that when there is no demand, the costs associated with the services increases. For the services, inventory cannot be maintained and it is often subjected to the idle production capacity.

2. Inseparability- it is important to mention that the once produced, services are consumed straight away. The consumers do not separate the service from the service deliverer. Furthermore, the interaction between the service provider and the consumer is highly variable.

3. Inconsistency- The service personnel associated with the services have a varied type of capability and their day to day performance also varies. It is important to mention that inconsistencies can be reduced through mechanization, training, and standardization.

4. Intangibility- Services cannot be touched and due to this, the services can be made tangible only to a certain extent.

It is a bit harder to market because marketing depends on the consumer's willingness and demand. If a consumer does not feel the urge to buy then there must be some factors that are hindering the marketing process.

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