EMERGING TRENDS AND CONCLUSIONS:THE NATURE OF SERVICES

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THE NATURE OF SERVICES

Initially, in the marketing field it was assumed that the marketing of goods and services were essen- tially identical. However, marketers increasingly realized that the marketing of services is separated from the marketing of goods by a number of attributes (Gro¨nroos 1978; Shostack 1977a, b; Zeithaml 1981). Generally, the following four attributes are used to distinguish goods from services (Zeithaml et al. 1985):

1. Intangibility: Services are much less tangible than physical goods. Services are experiences rather than objects that can be possessed.

2. Inseparability of production and consumption: Goods are first produced and then consumed.

Services, on the other, hand, are characterized by simultaneous production and consumption.

3. Heterogeneity: The quality of a service may vary from service provider to service provider, from consumer to consumer, and from day to day.

4. Perishability: Because services are experiences rather than objects, they cannot be stored. As a result, service providers may find it difficult to synchronize supply and demand.

Intangibility is generally recognized as critical to the dichotomy between goods and services (Zeithaml et al. 1985). The other three attributes can be viewed as consequences of intangibility. Each attribute leads to specific problems for service marketers, which in turn necessitate special marketing strategies to solve them. For instance, intangibility may affect the marketing communi- cations of an organization because services cannot be easily communicated to consumers.

Quality management in service organizations is especially strongly affected by these attributes of services vis-a`-vis goods. First, because services are performances rather than objects, service orga- nizations might find it difficult to understand how consumers perceive and evaluate service quality. Consequently, uniform and consistent quality standards can rarely be set (Berry 1980; Zeithaml 1981). Secondly, services are characterized by simultaneous production and consumption. Thus, services are not manufactured at a plant but are generally the result of the interaction between customer and service provider. Consequently, quality control will be rather difficult to ensure (Gro¨nroos 1978). Thirdly, services, especially those with high labor content, are heterogeneous. As a result, consistent and uniform quality will be a serious problem because it is contingent on the interaction between customer and customer-contact service employee (Bitner 1990; Czepiel et al. 1985). Finally, perish- ability means that services cannot be stored and hence quality cannot be verified in advance of the sale (Shostack 1977a). In the next section, we will discuss the service encounter, which is at the heart of the majority of service organizations.

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