Page 52 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 3: Services and their Characteristics

services, the producer and the consumer must meet and interact at the time of consumption. Notes
Both must normally meet at a convenient time when the producer can pass on the benefit to
consumers. In personal care services, the consumer must be present during the entire production
process e.g. a patient has to be there while a surgeon is performing a surgery. Inseparability
happens in both the cases when the service is provided by a human being or by a machine. The
services of a machine can only be realized when the consumers interact with the machine. Due
to changes in information technology, it is possible to geographically separate the producer and
the consumer of a service e.g. a banking service is possible through Internet, ATM, kiosks and
mobile or tele-banking facilities due to low level of personal contact.

Inseparability has its own marketing implications. In a manufactured good consumption process,
the product can be produced, distributed, inventoried at retailer point and can be consumed
after procurement and stored for consumption. Inseparability causes a modification to the service
consumption process. They are generally sold first, then produced and consumed simultaneously.
While the method of producing a good is of little relevance to the consumer, production process
of services is critical for customer satisfaction. In the goods marketing, they are not part of the
production process and they are satisfied if the product meets their expectations. In the services
marketing, since the consumer is a part of the production process, the process is as important as
the end service. So in some instances, a small change in the quality level of the production
process may totally destroy the value of the service.

Variability

Mass produced goods and services can be standardized and the current age is the age of
standardization. But in case of services like airlines, legal advice and financial services, it is very
difficult to keep the services consistent and standardized. Variability in services has an impact
not only on customer satisfaction but also in the production process of services. As the customer
is involved in both production and consumption process at the same time, variability has a
greater impact on services marketing. It is very difficult to monitor and control services for
consistency and standardization. The opportunity for pre-delivery inspection and rejection of
products is possible in manufactured goods but is impossible in services.
Variability in production standards is of greatest concern to service organizations where customers
constitute an important part of production process. This is true in cases of labor-intensive services.
There is a higher scope for quality control in machine-based services during its production, e.g.
telecommunication and mobile services can operate at a very low failure rate. The equipment-
based services are less variable than human-based services. Today, interactive voice response
systems and virtual representatives on Internet are providing better customer service than human
operators. The variability of service output poses problems for brand building. It is easy to
incorporate monitoring and quality control systems to manufacturing processes for measuring
consistency in output. This consistency is the ‘brand promise’ for a manufactured product. To
reduce variability in services, marketing managers should try to simplify jobs, automate jobs by
substituting interactive machines in place of human service providers.

Did u know? What are hybrid services?
Hybrid services like restaurants where both product and service are important.

Perishability

Manufactured goods can be stored for future consumption whereas services cannot be stored. It
is possible for the manufacturer to store and manage inventory levels to suit different market
situations and demand patterns. The services in contrast neither can be stored nor can be carried

LOVELY PROFESSIONAL UNIVERSITY 47