Q) Describe the major characteristics of a service product ? What are the steps involved in developing a service product ?
A product is something that a producer makes and offers to customers to provide satisfaction of the needs. Service products are different from goods in 5 major characteristics.
Goods are tangible and can be seen, felt or tasted whereas services are intangible. Eg: An educational institution. One can see the buildings and all but not the quality of education. Thus service products need to be evaluated in terms of the knowledge, intellect and character of the alumni. This can be perceived but cannot be measured. One cannot see, feel, smell, touch or measure a service performed. It can only be experienced from the effects produced.
A physical item is produced in a factory, bought from a shop and consumed in the buyer's premises at his convenience. But when a person buys a service of a doctor, the production and consumption of the service takes place at the same time. Here the production and consumption cannot be separated. The product exists only when consumption takes place.
Because of the factor of inseparability, it is not possible to produce a service in advance according to specified standards. If the same person is providing the service, then quality consistency cannot be met all the time. Eg: In a restaurant, the service quality also depends on the behavior of the customer. But generally, dissatisfaction experienced is not always attributed to customers, but to the restaurant.
Supply of services cannot be stored. You can store the fireworks made for this Diwali and use it next year, not so with the services. Eg: If an advertisement is not seen, it is dead. Empty seats in a cinema hall cannot be carried over to the next show. Service products perish, if not utilized when available. Stability of operation is not possible for the services because of perishability.
No ownership passes from seller to buyer in a service. The buyer only acquires the right to certain benefits of what the seller offers. Eg : Railway berth seats are reserved only for the period of the journey, the ownership is with the railways.
Steps Involved In Developing A Service Product
Steps involved in developing a service product are
- Determine what the customer values as benefits (benefit concept)
- Determine which of these benefits should be offered (service concept)
Decide on the precise service offer which includes forms and levels of the benefits to be offered and the arrangements for the delivery of the service (delivery system). The benefit concept will include expectation of the customer which are bundles of functional and psychological attributes.
One needs to be clear on who the customer is. Eg: The customer of an educational institution is the student, the parent and also the part of the society that will benefit from the student's education.