Services versus Products

Read this chapter, which describes how intangibility differentiates a service from a product. While reading this passage think about what intangible purchases you may have made and how you determined the value of the product was high enough given the price.

Heterogeneity

Heterogeneity, also known as variability, describes the uniqueness of service offerings.

Learning Objectives

Discuss how heterogeneity relates to service quality and delivery

Key Takeaways

Key Points

While products can be homogeneous and mass produced, the same is not true of services.
Many services regarded as heterogeneous are typically modified for each consumer or situation.
Despite the heterogeneity of service quality, It is the quality of the service that will essentially set two competing firms with similar products and services apart.

Key Terms

heterogeneity: This term describes the uniqueness of service offerings.

While products can be homogeneous and mass produced, the same is not true of services. The term heterogeneity describes the uniqueness of service offerings (also known as variability). In other words, services are generated, rendered, and consumed at one time. The service can never be exactly repeated as the same point in time, location, or circumstances, or with the same configurations or resources, even if the same consumer requests the same service.

Many services regarded as heterogeneous are typically modified for each consumer or situation. For example, the taxi service that transports the consumer from his home to the opera is different from the taxi service that transports the same consumer from the opera to his home. Each trip involved a different point in time, another direction, and maybe another route, taxi driver, or car.

McDonald's Big Mac: Big Macs are mass produced and almost identical, but the same is not true for the services rendered by the staff.

Given that services are heterogeneous, it is essential that each and every customer receive excellent service. Heterogeneity of service quality does not imply that no two customers can receive great service, it just means that no two transactions can be repeated identically. It is the quality of the service that will essentially set two competing firms with similar products and services apart. Marketers can leverage the service offering to differentiate themselves from the competition and attract customers.

When the physical product cannot easily be differentiated, there is scope for customizing the service per customer requirements. Such customization ensures that the actual customer encounter assumes particular significance for them. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Thus, particular care should be taken in designing the service offering.