I.

LEARNING OBJECTIVES

Define and explain the four main

characteristics of services: continuum of
products based on their intangibility,
intangibility, inseparability, Heterogeneity ,
and perishability.

Lesson 1:A continuum of products

based on their intangibility
At the end of this chapter, the successful
learner will be able to:
● Describe the continuum of products
POLYTECHNIC UNIVERSITY OF THE based on their intangibility.
PHILIPPINES
Lesson 2: Intangibility
At the end of this chapter, the learners
should be able to:
College of Business Administration
● Determine the overall idea/concept
of services being intangible &
Bachelor of Science in Business
● Tell the relation/connection of
Administration Major in Marketing
intangibility to inseparability
Management
A.Y 2022-2023 Lesson 3: Heterogeneity
At the end of this chapter, the learners
Chapter IV: Characteristics of Services should be able to:
● Define and understand
Lesson 1: A continuum of products based heterogeneity.
on their intangibility ● Understand and know the marketing
Lesson 2: Intangibility challenges created by heterogeneity
Lesson 3: Heterogeneity and,
Lesson 4: Perishability ● Understand and know the possible
solutions to challenges created by
Presented by: heterogeneity.

1. Janelle Bonuel Lesson 4:

2. Jann Caespar Mular At the end of this chapter, the learners
3. Sydhelle Irish Oyco should be able to:
4. Mark Raymond Pagayatan ● Determine and comprehend the
5. Lance Harold Talplacido concept of services’ perishability.
● Acquire knowledge about the
Presented to: challenges perishability in services
may have and its possible solutions.
Professor Leonardo G. Adap

1
 II. DISCUSSIONS being aware of their characteristics enables
service providers to better recognize and
Services are provided in many ways cater to customers’ needs more effectively
by restaurants, hotels, and resorts. Through Finally, understanding the characteristics of
the preparation and serving of meals to services can help businesses differentiate
customers, restaurants provide food and themselves from their competitors by
beverage services. By offering comfortable offering unique and valuable services that
lodging and amenities during customers' meet the needs of their customers So,
stays, hotels and resorts provide lodging buckle up and get ready to explore the
and hospitality services. Services require fascinating world of service characteristics!
direct engagement between the service
provider and the customer, therefore The four key characteristics that define
meeting the needs of the customers is services are:
critical. Furthermore, services are frequently
modified to match the needs and ● A Continuum of Products
satisfaction of customers. Based on Their Intangibility
● Intangibility
According to Philip Kotler the father ● Heterogeneity
of modern marketing , A service is an act of ● Perishability
performance that one party can offer to
another that is essentially intangible and
does not result in the ownership of anything.
Its production may or may not be tied to a Lesson 1: A Continuum of Products
physical product. based on their Intangibility

This means service is something What is a continuum?

that one person can do for another person, A continuum is a coherent whole
but it's not something you can hold or own. characterized as a collection, sequence, or
It's intangible, meaning you can't touch it. progression of elements varying by
For example, getting a haircut is a service. degrees.
You don't get to keep anything tangible from
the experience, but you do get the benefit of Most of the products offered contain
the haircut itself. tangible and intangible elements that is why
there are few examples of pure service and
Learning the characteristics of services pure goods.
will help us understand services more
deeply and accurately. Furthermore, Pure goods products that do not contain
Learning the characteristics of services is any intangible properties.
important for a few reasons. First, since Pure service services that consist of mainly
services are intangible and can be an intangible offering.
challenging to define or measure, so
understanding their characteristics can help The illustration of the tangibility spectrum
us define and evaluate them. Second, displays a continuum of products based on
because services are frequently tailored to their intangibility, where goods are tangible
meet the demands of specific customers, and services are intangible.

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 such as finance, free servicing, and
a warranty period.
Example: Machineries

● Major service accompanying

minor goods
Airlines primarily deliver intangible
benefits – the physical movement of
people, luggage, and goods. They
have some tangible offerings as
well. Usually, food and beverages
The product-service continuum or are served on the flight.
intangibility continuum, shows the Example: Airlines, Cosmetics, Salon
continuous activity from tangible dominant
to intangible dominant. ● Pure service
Professional service firms, banking,
● Tangible Dominant and insurance industries are at the
Goods that possess physical end of the continuum. They can be
properties that can be felt, tasted, considered “pure” service firms as
and seen before the consumer's they do not tend to offer anything
purchase decision. tangible.
● Intangible Dominant Example: Consultation
Services that lack the physical
properties that consumers can Lesson 2: Intangibility
sense before the purchase decision.
These services are purely processes Short Introduction:
and don't involve the possession of
The second characteristic of services is
things.
Intangibility. It came from its root word
Intangible, which means it is not capable of
There are four types of offers involving
being perceived physically. The core idea of
goods and services:
this second characteristic
● Pure tangible goods
The consumer purchases a physical Why are services intangible?
product without any expectation of -They cannot be seen, smelled, tasted,
additional service. heard and touched. It operates and
Example: Sugar, Soap functions differently compared to tangible
goods. It is hard to determine services,
● Tangible goods with especially without having familiarity or
accompanying services experience. Services also tend to give
The consumer primarily receives curiosity and uncertainty due to its
tangible products; however, the mysterious and competitive world. The only
manufacturer may package the time that the services can be felt is when
offering with intangible elements, they give satisfaction and convenience after

3
its performance. In some cases, other -Despite all the previous stated problems
people still remain in doubt with so many because of services being intangible, it is
questions after the distribution of the still important. Its significance in the market
service. is inseparable. It offers value that is able to
EXAMPLE: Someone planning or wanting meet customers and consumers needs and
to get a cosmetic surgery wants. Their demands often come with
outcomes after procuring and attaining
services. Services give satisfaction and a
How does it influence the services? wonderful experience to customers and
-Since the five human senses are not consumers, especially when it is a good
usable when it comes to services, then the service. This leads to more positive things,
customers and consumers' own perception such as them being happy, in a good mood
of the service usually focuses on its tangible and many more.
evidence and price and not on the service EXAMPLE: Someone who tested to fly with
itself. They are normally taking a lot of risk Cebu Pacific for the first time and made a
when availing services compared to statement afterwards that she will always fly
acquiring tangible goods. Customers and with them for lifetime starting from that
consumers really face a lot of difficulty when point.
it comes to services, especially if they have
trust issues, doubt and even suspicion,
which is normal and valid to have. Additional Information:

EXAMPLE: Someone buying a massage -Intangibility is somehow connected to

chair VS. Someone trying to book for a Inseparability. Inseparability shows the
massage appointment opposite process of services and tangible
goods. It also states the idea that customers
and service providers make an interaction
What are its marketing challenges during the service production process. It
and possible solutions? validates the idea that service providers
really play an important role in the service
MARKETING POSSIBLE
familiarity, experience and satisfaction of
CHALLENGES SOLUTIONS
customers and consumers. It also does not
Difficulties with Adding physical mean that the same service will be given to
assessing evidence customers and consumers, but rather the
qualities same in standard and quality to each
service that they will get. Inseparability also
Increased level Developing comes with marketing challenges and
of uncertainty strong brands possible solutions as well.
EXAMPLE: Someone getting a haircut and
Perceived high Facilitating
showing it to his friends making them get a
level of risk recommendatio
haircut too at the same barber shop. They
n
may have gotten different types of haircuts,
but all of them are happy and satisfied
afterwards.
Why is it important?

4
 ● This customization and
personalization lead to variability in
MARKETING POSSIBLE
the quality and delivery of the
CHALLENGES SOLUTIONS
service, as it is influenced by factors
Production process Monitoring and such as the skills, experience, and
affects the service controlling the attitudes of the service provider, as
outcome service production well as the particular circumstances
process of the service encounter.

Employees affect Management of The inconsistency in service is mainly

the service consumer and because service is being delivered by
outcome producer interaction different people with different delivery times,
scenarios and consumer involvement levels.
Customers affect Precisely defining
each other target market For example, when wanting to get a
haircut, a lot of variables will contribute to
the service quality experience. For example,
Quoted Statement (Proof Of Relevance): the waiting time and condition of the place
According to LIGS University “As service's where you are waiting, while waiting for your
nature is intangibility, therefore turn to receive the haircut, the attitude of the
manufacturing and service delivery is more barber before, during and after the cut, did
complex than a product”. And he entertain or talk to you in an interesting
manner, and lastly, did you like your final
The I EDUNOTE Team stated that “As the
haircut?
buyers are interested in service quality, the
service provider must add or indicate
Similarly, the service quality experience in a
tangible dimensions to claim its promises”.
restaurant and in airlines will differ each
time depending on the waiter, the other
Lesson 3: Heterogeneity
guest, the cabin crews, co-passengers and
the service itself.
For the next characteristic of service, we will
now discuss HETEROGENEITY.
Having all these, and because of these
factors, marketing challenges created by
WHAT IS HETEROGENEITY?
heterogeneity arises.
● HETEROGENEITY refers to the
The major challenge presented by
variability or inconsistency in the
heterogeneity is the fact that service
delivery and quality of services due
standardization and quality control are
to the human element involved in the
difficult to achieve.
service delivery process.
● As opposed to goods, which can be
Since service generally deals with people,
standardized, services, on the other
the service provider and the consumer, and
hand, are frequently tailored to meet
each person and individual has different
the specific requirements of each
traits and personality, this is where
client,

5
difference in the service quality experience "bad day," customers might think less of it.
happens. The company may never again have the
chance to serve that customer.
For example, in a restaurant, the attitude of For every problem, there is always a
a waiter may differ when dealing on a table solution, and here are some possible
with nice persons compared to dealing on a solutions to challenges created by
table with rude persons. heterogeneity.

The mood and the attitude of the people There are two contrasting solutions to
involved in the quality experience greatly address the problems of heterogeneity, one
affects the whole service quality experience. is the pursuit of customizaiton strategy
and the other one is the pursuit of
To add to that, the fact that not only does standardization strategy.
the consistency of service vary from
company to company and among The motivation behind a customization
employees within a single company, but it technique is to fit items or administrations
also varies when interacting with the same to meet the one of a kind necessities or
service provider on a daily basis is another inclinations of individual clients. Companies
challenge presented by heterogeneity. can differentiate themselves from their rivals
and provide customers with greater value by
It is quite understandable to encounter offering individualized options.
differences from the same services of Customization can prompt expanded
different companies because each company consumer loyalty and steadfastness, as well
tries to have an edge over the other and try as higher benefits through premium
to offer a better service quality experience. estimating or expanded deals volume.
Yet, differences in service quality Products that are made just for you,
experience can also be noticed with the adaptable service options, and
same provider and that is the other individualized marketing messages are all
challenge presented by heterogeneity. examples of customization. The most
important thing is to know which aspects of
For example, you loved Jollibee because in a product or service are most important to
the Jollibee branch that you usually go to, each customer and to provide options that
everyone, from the waiter, cashier and satisfy those requirements.
every employee is smiling, and because of
some circumstances you end up on a The motivation behind a standardization
buying on a different branch and notice that strategy is to accomplish consistency and
employees there do not smile as much and consistency in items or administrations
friendly as much as those who are from the across various business sectors and areas.
usual brand that you order from. This procedure includes fostering a
normalized item or administration that can
Particularly frustrating are the issues that be created or conveyed productively and
heterogeneity brings to marketing. A reliably, no matter what the market or area.
company might make the best product in
the world, but if an employee is having a

6
In the end, even if heterogeneity presents
problems in marketing, it provides Demand Exceeds Supply of Service
differentiation and innovation which drives Available: The more demand, the less what
the marketing world. the business can supply results in long
waiting periods, therefore, unhappy
Lesson 4: Perishability customers.

Perishable — liable to perish. ● For Example, Din Tai Fung is a

In business terms, Perishability is one of the chinese restaurant that gained a lot
characteristics of services that conveys the of attention from the social media
idea that a service cannot be rendered in platforms and because of it, a lot of
advance and stored. people wanted to try it. But then,
Why is service perishable? Most services because of its sudden increase in
are consumed as soon as they are demand, customers had to wait in
produced making them short-lived. long lines for hours just to
experience the quality of their food
Examples of perishability: food items, and service, resulting in some of the
airline flights, auto repair, event tickets, customers getting tired of waiting
service appointments. (Dentists, Nails, Hair and just went to other restaurants
salon and others) available.

How does it influence services? To meet Demand Exceeds Optimal Supply of

demand, businesses cannot plan to offer Service Available: There is increased
more services. Product manufacturers that demand for a service than what can be
produce tangible goods employ accurate properly supplied to the potential customers.
forecasts to arrange for inventories. Yet,
perishability in the service industries is ● Airlines typically staff flights with the
intangible, which means it is not a tangible same number of flight attendants
good that can be measured and quantified. regardless of the number of tickets
As a result, it is impossible to make precise actually sold. So, when the demand
predictions. exceeds the favorable supply of
service, the quality of the service is
Perishability is important for businesses as indifferent correspondingly, the
it affects sale prices, inventory levels, and expectation of the customers are not
marketing plan for specific products. met, dissatisfaction among
Therefore, companies utilize unique customers and negative
strategies, such as dynamic pricing, to word-of-mouth publicity follow.
reduce the negative effects of the
perishability of their services on their Lower Demand than Optimal Supply
processes. Levels: Resources are underutilized and
operating costs are wasted when demand is
Marketing Challenges Caused by below optimal capacity.
Perishability and Their Possible
Solutions. Demand and Supply at Optimal Levels:

7
The ideal situation is for demand to match significant relationship with the consumers.
supply.

Use of Nonpeak Demand Periods. Uses

service downtime to promote to various
market segments with differing demand
patterns or to prepare in advance for peak
times. With Nonpeak demand development
in can reduce perishability of the service in
two ways:

1. Employees can be cross-trained to

execute a range of other tasks
during Nonpeak demand periods to
aid coworkers during peak demand
periods.
2. By marketing to a different market
Demand Strategy: segment with a different demand
Utilizing Creative Pricing strategies to pattern than the company's
Smooth Demand. Service businesses traditional segment, nonpeak
frequently employ innovative pricing demand can also be established to
strategies to manage fluctuations in earn additional income.
demand. Targeting particular demographics
like senior citizens, families, and college Supply Strategy:
students has also been done through the Utilize Part-Time Employees. For years,
use of creative pricing. This kind of pricing retailers have hired part-time workers to
approach has helped in keeping several improve their supply of service over the
target markets from simultaneously holidays. One advantage of hiring part-time
experiencing the same consuming workers is that it costs lower labor and a
experience while also helping to smooth out flexible labor force that can be hired when
changing demand. necessary and discharged during non-peak
periods. On the contrary, customers
Implement a Reservation System. sometimes identify a company with lower
Implementing a reservation system wherein work abilities, lack of motivation, and
consumers reserve a certain time slot for a organizational commitment due to its
specific service of the company lessens the part-time employees.
likelihood that the consumer would not get
the service and minimizes the amount of Capacity Sharing. It is about collaborating
time they must wait in line. with other service providers to form a type
of service cooperative that enables the
Shift Demand to Complimentary cooperative to increase its overall service
Services. These are services given to the supply.
customers at no cost. The goal of this is to
increase customer satisfaction and build a Preparation in Advance for Expansion.

8
Despite the fact that Preparation for Goods-Service Continuum – BMS |
Expansion does not makeshift for the Bachelor of Management Studies Unofficial
challenges, this can be a great help for the Portal. Bms.co.in.
future of the business reacting to the https://www.bms.co.in/explain-the-goods-ser
demand pressures. vice-continuum/

Utilization of Third Parties. The usage of Characteristics of Services. (n.d.).

third parties to service customers can http://www.mmmut.ac.in/News_content/121
increase supply of service as they can 45tpnews_10142020.pdf
assist in communicating or interacting with
the customers. With this, the companies can Introduction to Service Marketing. (2019).
save on costs, personnel, adding facilities Ligsuniversity.com.
and many more. https://ligsuniversity.com/blog/introduction-to
-service-marketing#:~:text=P.,tied%20to%2
Increase Customer Participation. 0a%20physical%20product%E2%80%9D.
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greater customer experiences, make the Perishability Importance & Examples | What
company relatable and essential and focus is Perishability in Marketing? | Study.com.
on the retention of the service. There can be (2022). Study.com.
advantages and disadvantages if the https://study.com/academy/lesson/perishabil
customer wants to be part of the service: ity-importance-examples-marketing.html

Advantage: It is generally a function of Sustainability and Services in Action. (n.d.).

convenience, price, and customization. http://ndl.ethernet.edu.et/bitstream/1234567
Disadvantage: The more the customer 89/20012/1/72.pdf
plays part in the service, the less control of
the service that the company can maintain Team, W. (2022, January 23). Service
over the quality of the service being Sector. WallStreetMojo.
provided. https://www.wallstreetmojo.com/service-sect
or/#4-education
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