Chapter 15 - Services & Relationship Marketing

Question 1

What are the five distinct characteristics of services?

Answer 1

1. Intangibility
2. Perishability
3. Variability
4. Inseparability
5. Lack of ownership

Question 2

What does Intangibility mean?

Answer 2

Services are itemised on the receipt but can’t be touched, tasted, seen, heard or smelt. They are delivered and experienced only post-purchase. Two types of cues that help customers assess services are:

• Intrinsic cues. Drawn directly from the service itself and are difficult to change (reputation, rankings)
• Extrinsic cues. Surrounds the product and can be changed relatively easy (subjective communication such as advertising, word-of-mouth).

Question 3

What does Perishability mean?

Answer 3

Services are manufactured and consumed simultaneously; can’t be stored prior or after the service encounter. When being able to predict behavioral/demand patterns, service capacity should be adapted.

Question 4

What does Variability mean?

Answer 4

It is difficult to standardise delivery since services are produced and consumed simultaneously. Brand promises can sometimes lead to excess capacity and sometimes insufficient, so it is important to plan for breakdowns to mitigate potential harm.

Question 5

What does Inseparability mean?

Answer 5

Coinciding production and delivery means that customers come into contact with service providers and there is an interaction between parties.

Question 6

What does Lack of ownership mean?

Answer 6

Arises naturally from the other aspects. Services can’t be owned since nothing is transferred during the interaction or delivery experience. (May be legal transaction). A sense of ownership can be promoted with reward programs.