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Chapter 12 Managing Services - Chapter 12 Managing Services...

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Chapter 12 Managing Services UNIQUENESS OF SERVICES services- intangible activities or benefits that an organization provides to consumers in exchange for money or something of value - growing sector - growth is the result of increased demand for services that have been available in the past and the increasing interest in new services 1) Four I’s of Services i) Intangibility- services are intangible (a) Much more difficult for consumers to evaluate them (b) To help consumers assess and compare marketers try to make them tangible or show the benefits of using the service (airlines) ii) Inconsistency-developing, pricing , promoting, and delivering services is challenging because the quality of a service is often inconsistent (a) This is because services depend on the people who provide them , and that quality varies with each person’s day to day job performance iii) Inseparability- the consumer cannot separate the deliverer of the service fromt eh service itself iv) Inventory- carrying costs are more subjective and are related to idle production capacity, which is when the service provider is available but there is not demand (a) Cost of inventory for a service is the cost of paying the person used to provide the service along with any needed equipment (b) Idle costs can be cut back by reducing hours or having no salary to pay b/c of the commission compensation system 2) Service Continuum i) Many companies are not clearly service or good based organizations ii)
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