Nature of Services

Services have five basic features that also set them apart from goods. Because each feature begins with the letter "I", they are popularly called the five Is of services.

• Intangibility — Services cannot be touched; they are experiential. You cannot taste a doctor's treatment or touch entertainment — you can only experience it. An important consequence is that the quality of a service often cannot be judged before it is consumed (and therefore before it is bought). So providers must consciously design the service to give the customer a favourable experience — for example, a doctor's treatment should feel like a good experience.
• Inconsistency — There is no standard tangible product, so a service has to be performed afresh each time. Different customers have different demands and expectations, so providers need the freedom to alter their offer to match each customer closely — as happens, for instance, with mobile services.
• Inseparability — Production and consumption of a service usually happen at the same time, which makes them seem inseparable. A car can be made today and sold a month later, but most services must be consumed as and when they are produced. Technology may substitute for the person — an ATM can replace the bank clerk for cash withdrawal or cheque deposit — but the customer's presence and interaction still have to be managed.
• Inventory (less) — Having little or no tangible component, services cannot be stored for future use; they are perishable. A provider can at best store some associated goods, not the service itself, so demand and supply must be matched in real time. A railway ticket can be stored, but the journey is experienced only when the railway provides it.
• Involvement — The customer participates in the delivery of the service and can have it modified to suit specific requirements. …