Business Tips and Insights

For a layperson, services are essentially intangibles. Their purchase does not result in the ownership of anything physical. But the actual definition is that Services are that separately identifiable, essentially intangible activity that provides satisfaction of wants, and are not necessarily linked to the sale of a product or another service. There are five basic features of services.

Intangibility: One cannot taste a doctor’s treatment, or touch entertainment. One can only experience it. Therefore, Services are intangible, i.e., they cannot be touched. An important implication of this is that quality of the offer can often not be determined before consumption and, therefore, purchase.

Inconsistency: The second important characteristic of services is inconsistency. Different customers have different demands and expectations. Service providers need to have an opportunity to alter their offer to closely meet the requirements of the customers. They cannot be performed earlier to be consumed at a later date. For example, a railway ticket can be stored but the railway journey will be experienced only when the railways provides it.

Inseparability: Another important characteristic of services is the simultaneous activity of production and consumption being performed. This makes the production and consumption of services seem to be inseparable. Service providers may design a substitute for the person by using appropriate technology but the interaction with the customer remains a key feature of services.

Inventory (Less): Services have little or no tangible components and, therefore, cannot be stored for a future use. That is, services are perishable and providers can, at best, store some associated goods but not the service itself.

Involvement: This feature refers to the participation of the customer in the service delivery process. A customer has the opportunity to get the services modified according to specific requirements.