Nature of Services

A service is an activity which has some element of intangibility associated with it, which involves some interaction with customers or with property in their possession, does not result in transfer of ownership. Services vary considerably over a range of factors including whether they require a customer’s physical presence, and whether they are equipment intensive or people intensive.


Service: Is any activity or benefit that one party can offer to other that is essentially intangible and does not result in the ownership of any thing. Its production may or may not be tied to a physical product.

The increasing interest in the services sector is accompanied by considerable disagreement and debate as to what constitutes a service and whether services marketing is a distinctive subject area.

Four categories of product / services are distinguished which are offered to customers from a pure good to a pure service:

1. A pure tangible good: No services accompany the product For example: Sugar, salt, Toothpaste etc
2. A tangible good with accompany services: To enhance its consumer appeal. For example: Computers? TV after sales services, Fast food centers.
3. A major service with accompanying minor goods and services: This includes a major service aspect along with goods (which are insignificant). For example: Airways, Health services, hair cutting saloons etc
4. A pure service is the one which does not involve any physical goods along with the service. For example: Teaching, Consulting etc.

What are Services?

Performed by
Individual (Beautician, Doctor)
Machine (Vending Machines, Robots etc)
Individual and machines (Lawyer, Computer).

Service is: an activity, act, deed, performance, efforts.

Directed to:
Customers (Men, Women, etc), Customer’s
Possessions (Money, Property, car), Business
users (Advertising, Insurance, Transportation)

Rendered for:
Profit (Air ways, restaurants)
Not for profit (Educational Institutions, and public Hospitals).

Characteristics of Services:

The services have unique characteristics which make them different from that of goods; the most common characteristics of services are:

1. Intangibility
2. Inseparability
3. Perishability
4. Variability


Services are activities performed by the provider, unlike physical products they cannot be seen, tasted, felt, heard or smelt before they are consumed. Since, services are not tangibles, they do not have features that appeal to the customer’s senses, their evaluation, unlike goods, is not possible before actual purchases and consumption. The marketer of services cannot rely on product based clues that the buyer generally employs in alternative evaluation prior to purchase. So, as a result of this, the services are not known to the customer before they take them. The service provider has to follow certain things to improve the confidence of the client:

i) The provider can try to increase the tangibility of services.
ii) The provider can emphasize on the benefits of the service rather than just describing the features.

Note all the service products have similar intangibility. Some services are highly intangible, while the others are low i.e. the goods (or the tangible component) in the service product may vary from low to high.


Services are typically produced and consumed simultaneously. In case of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later. But, incase of services, it cannot be separated from the services provider. Thus, the service provider would become a part of a service.


Services are deeds, performance or acts whose consumption takes place simultaneously they tend to perish in the absence of consumption. Hence, services cannot be stored. The services go waste if they are not consumed simultaneously i.e. value of service exists at the point when it is required.


Services are highly variable, as they depend on the service provider, and where and when they are provided. Service marketers face a problem in standardizing their service, as it varies with experienced hand, customer, time and form. Service buyers are aware of this variability. So, the service firms should make an effort to deliver high and consistent quality in their service; and this is attained by selecting good and qualified personnel for rendering the service.