Fundamentals of Business

Labour intensity

Labour intensity - Services usually involve considerable human activity, rather than a precisely determined process. Human resource management is important. The human factor is often the key success factor in service industries. It is difficult to achieve economies of scale or gain dominant market share.

Demand fluctuations - It can be difficult to forecast demand (which is also true of many goods). Demand can vary by season, time of day, business cycle, etc.

Buyer involvement - Most service provision requires a high degree of interaction between client and service provider.

Client Based Relationsh Relationships ips - Is based on creating long term business relationships. Accountants, attorneys, and financial advisers maintain long term relationships with their clients for decades. These repeat consumers refer friends and family, helping to create a client based relationship.

Service delivery

The delivery of a service typically involves five factors:

1. The service providers (e.g. the people)
2. Equipment used to provide the service (e.g. vehicles, cash registers)
3. The physical facilities (e.g. buildings, parking, waiting rooms)
4. The client
5. Other customers at the service delivery location

In a narrower sense, service refers to quality of customer service: the measured appropriateness of assistance and support provided to a customer. This particular usage occurs frequently in retailing.

Services marketing is marketing based on relationship and value. It may be used to market a service or a product. Marketing a service base business is different from marketing a product-base business.

There are several major differences, including:
The buyer purchases are intangible
III) The service may be based on the reputation of a single person
IV) It's more difficult to compare the quality of similar services
V) The buyer cannot return the service

Service Marketing mix adds 3 more p's, i.e. people, physical environment, process service and followthrough are keys to a successful venture. Service marketing also includes the servicescape referring to but not limited to the aesthetic appearance of the business from the outside, the inside, and the general appearance of the employees themselves.