Page 11 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes Generally, goods are produced, then sold, and then consumed. Services, on the other hand, are
usually sold first, then produced and consumed simultaneously.
The service provider and the client are often physically present when consumption takes place.
Sasser observed that the firm is unable to store or transport services that only direct distribution
is possible, thereby potentially limiting the number of markets the firm can cover. Apart from
the stress laid on ‘right place’ and ‘right time’ in case of distributing goods, there is additional
importance given to the performance of service in the ‘right way’ as well.

1.2.3 Less Standardised and Uniform

It is argued that it is often impossible to assure consistency in the services provided by a seller
or to standardise offerings among sellers of the same service, while it is possible to offer
consistency and uniformity of products. Levitt argues that such a distinction has limited value
because it is a production oriented approach as even an identical generic product will be
differentiated when it is viewed as offered product for sale. Thus, while the core product may be
uniform, the process will always be differentiated.

Secondly, Levitt argues that owing to the industrialisation of services, their production can no
longer be viewed as being heterogeneous. Attempts have been made to improve productivity
in the service sector by the introduction of technology. Uniformity can be achieved by substituting
equipment and machinery for labour. Hostage suggested that service firms could also reduce
variability by training the service providers in appropriate responses to each customer situation.
They can also monitor customer satisfaction through suggestion and compliant system so that
poor service can be detected and corrected.

1.2.4 Perishability

Kurtz and Boone observed that the utility of most services is short-lived; therefore they cannot
be produced ahead of time and stored for periods of peak demand. The perishability of services
is not a problem when demand is steady because it is easy to staff for the services in advance.
When there are wide fluctuations in demand there should be a highly flexible production
system or idle productive capacity.
Sasser has described several strategies for producing a better match between demand and supply
in a service business. On the demand side, the firm can make use of differential pricing, cultivating
non-peak demand and developing complementary services. On the supply side, for effective
matching with demand, the firm may hire part-time employees to serve peak demand; peak-
time efficiency routines can be introduced, facilities for future expansion can be developed, and
increased consumer participation can be encouraged.
Self Assessment

Match the following sets:
Set A Set B

4. Services cannot be stored a. Intangibility
5. Services cannot be patented b. Inseparability
6. Difficulty in quality control of services c. Heterogeneity
7. No mass production of services d. Perishability

6 LOVELY PROFESSIONAL UNIVERSITY