Services Marketing: Concepts, Cases and Strategies
Hoffman, Bateson, Wood & Kenyon
ISBN: 9781844808137
SHORT-ANSWER ESSAYS
Chapter 2: Fundamental Differences Between Goods and Services
1. Define the characteristics of intangibility, inseparability, heterogeneity, and
perishability.
ANS:
 Intangibility means that services have no substance and therefore cannot be
touched or evaluated like goods.
 Inseparability refers to the interaction and physical presence of the service
provider and the consumer throughout the service experience.
 The heterogeneity of services pertains to the variability that is inherent in the
service delivery process.
 Perishability refers to the service provider’s inability to store or inventory
services.
2. Discuss the marketing problems associated with intangibility and the possible solutions
to solve these problems.
ANS:
The marketing problems that arise include:
 it is difficult to easily display or communicate the properties of services to
consumers
 prices are difficult to set
 services are not patentable, thus they are easily copied by competitors
 services cannot be stored for future use
Solutions suggested to minimize the problems associated with intangibility include:
 utilizing tangible clues to influence customer perceptions of service delivery
 developing promotional plans that emphasize personal sources of information
 developing the organization's image to reduce customer levels of perceived risk
3. Discuss the marketing problems associated with inseparability and the possible
solutions to solve these problems.
ANS:
The marketing problems associated with inseparability are:
 the service provider's face-to-face interactions with the customer
 the customer's involvement in the service delivery process
 the impact of "other customers" that are sharing the service experience
 centralized mass production of services is difficult
Suggested solutions to minimize the impact of inseparability include:
Services Marketing: Concepts, Cases and Strategies
Hoffman, Bateson, Wood & Kenyon
ISBN: 9781844808137




the careful selection and thorough training of public contact personnel
manage customers to enhance their service experience
the use of multi-site locations to overcome the difficulties associated with
centralized mass production
4. Discuss the marketing problems associated with heterogeneity and the possible
solutions to solve these problems.
ANS:
The primary marketing problem associated with heterogeneity is that:
 Standardization and quality control are difficult for the service firm to provide on
a regular basis.
 Standardization may be achieved via automation--replacing human labor with
machines.
 In contrast, many service firms are taking advantage of the variability that is
inherent in service delivery by offering customized services.
 The tradeoffs associated with customer preferences with standardization and
customization includes price, speed of delivery, and consistency of performance.
5. Discuss the marketing problems associated with perishability and the possible
solutions to solve these problems.
ANS:
Due to the characteristic of perishability:
 it is not possible to inventory services
Strategies utilized to minimize the impact of perishability include:
 strategies to increase supply and/or alter demand
Strategies which increase the supply of service include:
 utilizing part-time employees
 sharing capacity with other service providers
 making preparations in advance with regards to future expansion
 utilizing third-parties
 increasing the amount of customer participation during the service process
Strategies to alter demand include:
 developing creative pricing strategies
 utilizing reservation systems
 developing complementary services
 developing nonpeak demand