Perishability

Perishability of services implies that service capacity cannot be stored, saved, returned, or resold once rendered to a customer.

Learning Objectives

Describe why business services are perishable and how perishability impacts services marketing

Key Takeaways

Key Points

  • Services cannot be stored, saved, returned or resold once they have been used.
  • When the service has been completely rendered, this particular service irreversibly vanishes as it has been consumed by the consumer.
  • The relevant resources, processes, and systems of a service are assigned for delivery during a definite period in time.
  • Perishability can affect company performance as balancing supply and demand is very difficult.

Key Terms

  • perishable: Liable to perish; short lived.

Perishability

Perishability is used in marketing to describe the way in which a service capacity cannot be stored for sale in the future. Services cannot be stored, saved, returned, or resold once they have been used. Once rendered to a customer, the service is completely consumed and cannot be delivered to another customer.

Services are perishable in two regards. First, the relevant resources, processes, and systems of a service are assigned for delivery during a definite period in time. For example, an airline can only sell seats on an airplane prior to the departure. This service is only available for that definite time period. An empty seat on a plane never can be utilized and charged after departure.

Second, when the service has been completely rendered, this particular service irreversibly vanishes as it has been consumed by the consumer. For example, once a passenger on an airplane has been transported to his destination, he cannot be transported again to this location at this point in time.

Perishability can affect company performance as balancing supply and demand is very difficult. Demand can be difficult to forecast. Demand can vary by season, time of day, or business cycle. As demand fluctuates, it can be very difficult to maintain quality service. For example, to offset high demand during the tourist season, a hotel in Hawaii may hire more employees. However, other time periods are not so easy to predict. During seasons of bad weather, a manager may find himself with too many staff. The opposite problem, that of having too little staff, can be true during an unexpected spike in demand.


Perishable Entity: What an airline ticket entitles a customer to cannot be stored, saved, returned, or resold after the flight. It is a perishable entity.