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Nature of Services

There are normally five characteristics of a service. They also distinguish them from items and are called the five Is of services. They are:
  1. Intangibility: Services are hard to understand. Can be understood only by expierence. We can never taste a doctor's treatment, or touch and feel entertainment. But we can experience it. An important fact which this brings out is that quality of the offer often cannot be found out before consumption and, therefore, buy. It is, therefore, important for the service providers that they consciously work on doing a good service so that the purchaser has a favorable experience. For example, a doctor should give his patient a Good experience so that he comes back.
  2. Inconsistency: The second important thing of this topic is inconsistency. Since there is no standard tangible product, services should be done exclusively every time. Demands and expectations differ from customer to customer. So service providers need to have an opportunity to switch their offer to meet the needs of the customers. Its happening in the case of mobile services.
  3. Inseparability: Another important aspect of services is that production and consumption should have to be done simultaneously. It shows that production and consumption of services are inseparable. With services that have to be consumed as and when they are produced its not the case like manufacturing a car today and selling it later. The interaction with the customer remains a key feature of services and cannot be replaced with any technology. Today Automated Teller Machines (ATMs) have replaced the banking clerk for the front office activities, but still the presence of the customer, is needed and his/her interaction with the process has to be managed.
  4. Inventory (Less): Services do not have tangible components and hence cannot be stored for a future use. I.e., services are unpreserved and vendors can, at best, save some related goods but not the service itself. It means that the demand and supply are needed to be managed because the service has to be done as and when the customer asks for it. For example, a railway journey cannot be experienced until the preserved ticket is not provided.
  5. Involvement: Finally the most important characteristic of services is the contribution of the purchaser during the service delivery process. A purchaser has the chance to get the services altered according to specific needs.

Difference between Services and Goods

From the above, it is clear that the two main differentiating characteristics of services and commodities are no manageability of tenure and presence of both provider as well as purchaser. While commodities are manufactured, services are done. A service is something which can never be taken away. The only thing we can take away is their effectiveness. And as the services are provided at the consumption point, there are no records. We can see from the above features that we can have following points as differences between commodities and services.

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