L2 - Nature of Service: Marketing and Challenges in Tourism

Objectives of Customer Service and Sales

By the end of this lecture students should be able to:

• Understand the differences between service products and manufactured goods from a marketing perspective.
• Understand the distinctive process of services marketing, and the challenges faced by service managers;
• Apply these understandings in the context of the tourism and hospitality management

Introduction to Service Products

Service Products differ from physical products in their composition, production process, delivery, and consumption. The management and marketing services therefore require approaches that are quite different from those traditionally used in the management and marketing of manufactured goods. These different approaches stem largely from the four distinctive features of services:

• Intangibility
• Perishability
• Inseparability
• Variability

These characteristics lead to different consumer perceptions and behaviors - making it more difficult for service providers to ensure customer satisfaction and to establish a competitive advantage. The distinctive characteristics also present significant challenges in the management of supply and demand, in ensuring consistent service quality, and in achieving operational efficiency. Service managers must understand and cope with these challenges if they are to compete successfully in the complex service environment. This lecture analyzes common characteristics of service products, and identifies some of the implications for services managers.

Four Distinct Features of a Service

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

1. Intangibility of Services

Services cannot be felt, seen. tasted, heard or smelled before purchase (Gibson, 2009) -Let's look at an example Imagine a guest booking a massage at a resort spa. Before the service, they can't physically touch or see the actual relaxation they'll experience-they can only rely on descriptions, reviews, or recommendations. The guest can't "test" the massage beforehand; they can only experience it during the appointment. This highlights intangibility because the service is based on feelings, experiences, and emotions-it can't be physically possessed, only felt and remembered.

What Else About Intangibility?

Tangibility exists along a continuum, and all products exhibit some tangible and intangible qualities. For example, in the case of a taxi service, the intangibility services (the journey to a desired destination) obviously involves a necessary, physical object (the taxi cab itself). But the service remains the primary product offering. Similarly, the services offered at a restaurant involve the combined effect of numerous intangible activities - including the acquisition of supplies, the preparation of meals, and the serving of those meals. The tangible components behind all this - the building, the interior decor, the kitchen equipment, the food items, and so on are obviously necessary for the services. However, the intangibility services activities make up the key product offering.

2. Perishability of Services

Services cannot be stored for later sale or use (Gibson,2009)

What Does Perishability Mean?

Perishability of services is a distinctive characteristic closely related to intangibility. Unlike physical goods, services cannot be "possessed."

• They cannot be stored,
• taken away, or used at a later time.
• Services "disappear" as quickly as they are delivered.

It is difficult to own and control products that "disappear" as quickly as they are delivered.

Example of Perishability

Imagine a hotel with 100 rooms available each night. If only 60 rooms are booked on a particular night, the remaining 40 rooms cannot be sold later-those unsold rooms represent lost revenue because that night's opportunity is gone forever. This reflects the concept of perishability: services in tourism and hospitality (like hotel rooms, airline seats, or event tickets) cannot be stored for future use-once the time passes, the opportunity to sell them is lost.

3. Inseparability of Service

Service product and consumer cannot be separated from their providers -What does this mean? Imagine a guest going on a guided snorkeling tour. The experience depends not just on the beautiful reef but also on the interaction with the tour guide. If the guide is friendly, knowledgeable, and engaging, the guest will likely have a great time. However, if the guide is distracted or unhelpful, the experience may be disappointing. This reflects inseparability-in tourism and hospitality, the service is produced and consumed at the same time and often relies on direct interaction between the service provider and the guest. You can't separate the guide's role from the overall guest experience.

Advantages of Inseparability

Advantages of Inseparability to Marketing, Quality and Multiple Consumption When an employee is offering different information about the products and service to its customer, this demonstrates inseparability, but with that it can be considered to be marketing (an example of customer service tactics). In this space the service provider controls the quality of this service through its interaction with the customer. Production, marketing and quality happens simultaneously because of service being inseparable. It can also be consumed by multiple consumers at once

Example of Inseparability

A family's first interaction when checking into a hotel is through the service offered by the front reception (inseparability). During this interaction the front desk reception could offer additional service during their stay such as "dinners at their restaurant, access to wifi, and other amenities" (marketing) Throughout this first interaction this employees has the ability to control its quality, "if the guest is unsatisfied, offer complementaries such as a room upgrade". This service is being received by not only one person but to the whole family as they are checking in together.

4. Variability of Service

SERVICE VEFLIITE HOTEL HOTEL - WELCOME RINK "Quality of service depends on who provides them, when, where and how they are provided"

What Does Variability Mean?

When providing services, we may often experience irregularities and inconsistencies. This could be a result of an individual that is offering this service, when they offer the service, where it is offered and how they offer it. All of which affects the quality of the service to be offered to customers. We mentioned earlier employees have the ability to control the quality of service but having this service being offered by multiple employees, companies may not be able to ensure that there is no irregularities and inconsistencies.

Example of Variability

Imagine two guests staying at the same hotel on different days.

• Guest A checks in and is greeted warmly by a friendly front desk agent who offers a complimentary welcome drink and provides clear information about hotel amenities.
• Guest B checks in the next day but is met by a different staff member who seems rushed and doesn't offer the same warm welcome or information.

Even though it's the same hotel with the same services, the experience varies based on who is delivering the service and when. This inconsistency reflects service variability-a common challenge in hospitality because services often depend on human interaction, mood, and circumstances.

Conclusion on Service Characteristics

From a services marketing perspective, the main objective of a customer service worker is to provide guests with a superior service experience. It is thus, imperative that CSW's understand the nature of their service offerings and be able to ensure customer satisfaction with the services rather than with the technical feature of various hotel products. The four basic differences between services products and manufactured goods are; - intangibility, inseparability, heterogeneity and Perishability. The consequence of the distinctive characteristics of service products present a significant challenge to service firms. However, service providers who can meet these challenges will significantly improve customer satisfaction, maintain the firm's competitive advantage, and lift its overall profit performance. It is therefore important that hospitality managers understand these distinctive characteristics of services, and the implications that flow from them - not only from a managerial perspective but also from the customer's point of view. Managers must be able to design and implement appropriate strategies to overcome the challenges and thus maximize the potential for competitive advantage.

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