Question

Answer in Brief.

State features of services.

Answer 1

Business services refer to those services which help in successful running of business.

The features of services are as follows:

1. Intangibility

Services do not have any physical (material) form. They are intangible in nature i.e. they cannot be seen and touched. However, a service can be experienced by the buyer or the receiver, i.e., their benefits can be felt.

E.g: Although insurance services provided by an insurance company cannot be seen, its benefits can be experienced. Due to intangibility, service providers must create good impact on customers by delivering timely and quality services.

2. Perishability

The provision (production) and acceptance (consumption) of the service has to happen simultaneously. Since services are intangible, they cannot be stored for future use.

E.g: If an insurance agent is going on a vacation for 7 days, he cannot store his work. That work will have to be either done by somebody else or will have to be done by him on his return.

3. Inseparability

It is not possible to separate the service and the service provider. In other words, service provider is always present when the services are delivered to customers. The production and consumption of services take place at the same time.

4. Non-Transferability

Unlike goods, services are non-transferable in nature. The ownership of the service does not get transferred from service provider to the customer.

E.g: Once the mobile bill is paid for a month, it does not mean customer owns the service. He again has to pay the bill in the next month also. 

5. Consumer Participation

Provision of services requires participation of both, the service provider and the customer. Without customer, service provider won’t be able to provide the service. Similarly, without the service provider, the customer will not be able to take benefit of the service.

E.g: An airline will be able to provide its services only to those customers who are in the aircraft. Any person who wants to avail the service of the airline will have to book a ticket and travel in the aircraft.

6. Heterogeneous (Inconsistency)

Services are heterogeneous, i.e. there is no perfect standardization of services. Even if the service provider remains the same, the quality of service may differ from time to time.

E.g: A banker may give better service to customers during afternoon time when there is less rush in the bank. Also, the banker might give better service to a high value customer as compared to a customer who keeps low balance in the account.