#1 Higher Education is a service. Describe how a university should market itself according to each of the 4 Characteristics of Services: Intangibility, Inseparability, Variability, Perishability. For each of the four Characteristics, explain one thing the university can do and explain that one thing in detail. Write two full paragraphs and write in your own words. Will be graded based on writing skills. OR CHARACTERISTICS SERVICES Services possess several distinct characteristics different from physical goods. As illustrated in Exhibit 10.1, these are intangibility, inseparability, variability, and perishability. We'll discuss each one and its impact on customers and marketing. EXHIBIT 10.1 Characteristics of Services Intangibility Inseparability Variability Perishability Learning reading speed 52% Intangibility A service cannot be experienced through the physical senses. It cannot be seen, heard, tasted, felt, or smelled by a customer. This property represents the intangibility of services versus goods; goods can easily be experienced through the senses. A State Farm Insurance agent issues a policy for an automobile. Yes, the customer will receive a written policy document. But the policy itself is not the product in the sense of a physical good such as a box of cereal or a bottle of shampoo. Instead, the product is the sense of financial security the insurance policy provides to the customer. It is the confidence that if something dire happens to the car, State Farm will fix it or replace it. LO 10-2 Explain the characteristics that set services apart from physical goods. So how do customers draw conclusions about a brand such as State Farm if they Learning reading speed 5234 can't actually try the product before purchase? This is one of the challenges of intangibles. Strong branding can be an important way to make a service seem more tangible. Service firms such as State Farm use strong imagery to send out signals about their products , increase trust and ease customer uncertainty about what is being purchased. Ever see the ads saying, "Like a good neighbor, State Farm is there"? This phrase and the accompanying visual images provide cues about the dependability of the service, replacing to an extent the ability customers have to try physical products in advance of purchase. When it comes to making purchase decisions about services, customers draw conclusions from what tangibles they can experiencethings like the company's people, website, marketing communications, office ambience, and pricing. In a service setting, the importance and impact of marketing are heightened considerably because in many cases there's little else tangible for the Learning reading speed 5234 customer to experience before purchase. Sometimes it is possible to enhance tangibility of a service through a bit of customer trial. For example, MBA programs often encourage prospective students to come to open houses or visit classes to gain a sense of how the school they are considering approaches teaching and learning. Vacation ownership companies such as Hilton Grand Vacations Club and Marriott Vacation Club actively solicit guests for tours of their facilities while they are visiting an area to allow them to experience a taste of what the location is like as a regular vacation destination. And advertising agencies make portfolios of past work available to prospective clients as sampling of the firm's creative capabilities. a Inseparability Even with the best efforts at enhancing a service's tangibility, a customer still can't really experience it until it is actually consumed. This characteristic represents Learning reading speed 5234 the inseparability of a serviceit is produced and consumed at the same time and cannot be separated from its provider. With physical goods, the familiar process is production, storage, sale, and then consumption. But with services, first the service is sold and then it is produced and consumed at the same time. Perhaps it is more accurate to think of a service as being performed rather than produced. In a theatrical play or an orchestral concert, many individuals have a part in the performance. Similarly, the quality of a service encounter is determined in part by the interaction of the players. Most elegant restaurants structure their customer encounters as elaborate productions involving servers, the wine steward, the matre d', the chef, and, of course, the table of diners. Benihana restaurants take the concept of service as drama to truly new heights of customer involvement and excitement-the company's tag line is "an experience at every table." 270 The inseparability of performance and Learning reading speed 529 consumption of services heightens the role of the human service providers in the customer's experience. It also leads to opportunities for considerable customization in delivering the service. Finicky customers in the hair stylist's chair can coax just the right cut. Want two? scoops of cinnamon ice cream instead of one on that apple tort? Just ask the server. In the financial services industry, for example, customization of services is prominent. As the need for physical bank branches diminishes with the growth in online banking, banks are faced with the challenge of maintaining a strong customer connection and providing good service. To provide greater customization options, customers can "create" their own bank web page with information specifically targeted to their needs. At the same time, online chat support is ready to provide real-time, specific help when needed.? Variability Learning reading speed 5235 An offshoot of the inseparability issue, variability of a service means that because it can't be separated from the provider, a service's quality can only be as good as that of the provider him-/herself.& Ritz-Carlton, Nordstrom, Disney, and Southwest Airlines have become iconic firms in their industries largely by focusing on their people-hiring, training, keeping, and promoting the very best people they can get. Legendary Southwest Chairman Herb Kelleher built a business in part around ensuring that his people were different from typical airline employeesmore engaged, fun, and fiercely loyal to the company. The same can be said for the other firms above. Focusing on employees as a source of differentiation in marketing is usually a smart move, mainly because so many firms just can't seem to pull it off very well. The point is to remove much of the variability of customers' experiences with your service and instead provide a more dependable level of quality. Go into any Nordstrom and work with any of Learning reading speed 5234 Nordstrom's sales associates and you will very likely experience the same high level of satisfaction with the service. The same is true for Ritz-Carlton, and any of the great service organizations. s. 10 Goods, in general, tend to be much more standardized than services because, once firm has invested in continuous process improvement and quality control in its manufacturing operations, products flow off the line with very little variation. With services, continual investment in training, retraining, and good management of people is required if variability is to be consistently low. It is in this area where the disciplines of marketing, operations, leadership, and human management probably have their closest intersection. What makes Ritz-Carlton great? A quick answer is: its people. But what makes its people great? World-class operations, leadership, and HR practices. And the net effect for Ritz-Carlton is that its branding and market positioning are largely defined by its wonderful people and resource Learning reading speed 5234 the way they handle each customer as a valued guest. For service firms, great marketing cannot take place without a strong overarching culture that values employees. Perishability