Addressing the unique characteristics of Service

Industry

Prof Ritesh Lal

Characteristics of Service Industry

Intangibility Perishability Variability Inseparability

Ways to tackle the Intangibility

Visualisation Association Physical Representation Documentation, facts and figures

Visualisation

The marketer find ways and means to help the customer visualise the service transaction benefits of consuming the service product. Pictures,films and presentations should be used evocatively.

Examples: Mauritius Tourism Promotion Board Jammu & Kashmir Tourism Development Corporation Malaysia and Singapore shopping week Club Mahindra Resorts

Association

The intangibility problem can be overcome by associating living persona which acts as a bridge. The consumers makes the analogy, believes the service delivery promise and gets some idea of the characteristics of the service.

Examples: ICICI Bank with Amitabh Bachchan/ Shahrukh Khan NIIT with Vishwanathan Anand Management Colleges: ISB, Hyderabad with Harvard,

Pennsylvania, and Kelloggs Visa Card with Sachin Tendulkar

Physical Representation

This helps in symbolising the existence and character of service industries. The tangibles help in making the offer believable. Some of the ways are:

Uniforms Colours Logos and Mascots Buildings Business Cards

Documentation, facts and figures

Examples: Max New York Life accredited with ISO 9001 and 9002

certificate and Superbrands India Educational institutions awarded with certification from

National Association of Accredition (NAAC), National Board of Accredition (NBA)

Annual reports, Profit & Loss statements, Balance Sheets, etc. are example of positioning documentation

VLCC use facts and figures for comparative emphasis to drive home their success.

Ways to tackle the Perishability

As the services cannot be stored, this robs the service marketer from the privilege of delayed sales and hence he suffers from lost opportunities. The following are the ways to overcome the perishability factor:

Over-Marketing Managing Demand Managing Supply

Over-Marketing

A service marketer targets for more customers than he has the capacity to serve.

Examples: Restaurants Railways Education

Managing DemandAccurate demand management would aid estimation and forecasting

which would in turn help avoid perishability. Nine different types of demand have been identified:

Rising Demand Falling Demand Zero Demand Full demand Overfull Demand (e.g., LPG, landline connection etc) Negative Demand (e.g., Cosmetic surgery, laser eye surgery etc) Latent Demand (e.g., Day-care centers & crèches, Sangam Direct

etc) Seasonal or irregular Demand (e.g., movie, hotel, ‘Happy Meals’ at

McDonalds etc) Unwholesome Demand (e.g., Indian leather garments protested by

PETA)

Managing Supply

A service marketers suffers from perishability if he is not able to manage his supply. They range from goods to personnel:

Goods (e.g., car rentals, restaurants etc) Systems and processes People (e.g., in retail store, banks during peak time;

buffet lunch in party)

Ways to tackle the Variability

This is done to eliminate the element of inconsistency and non-standardisation in the service offer and service delivery. Some of the ways are:

Training of Internal Customers (e.g., Call centres, Banks etc)

Recruitment and selection of Internal customers Training of External customers (e.g., in Banks etc) Automation (e.g., ATMs, Cash counting machine, touch-

screen enquiry system, internet reservation etc)

Ways to tackle the InseparabilityThere are ways to overcome inseparability: Training of Internal customers (In Hospitals

through interns, management colleges through RAs etc.)

Adopting and innovating other methods of service (Group therapy by psychiatrists)

Video Conferencing Robotics (surgeries through robots controlled by

surgeons from far-away places in developed countries)

Thank You!