With the unstoppable trend of firms outsourcing manufacturing jobs from the United States to overseas locations, it is a fact of life for many Americans that the fastest growing industry segment, and the one that will supply the most jobs, is the service industry. Thus, they must readily adapt to the skills and knowledge needed to successfully work in a 21st century environment that is becoming increasingly customer-oriented and interactive. Service industries range from government to private not-for-profit organizations and business organizations.
There are four unique characteristics that define the nature of a service. They are the following: service intangibility, service inseparability, service variability, and service perishability. The first, service intangibility, means that the service cannot be experienced before it is bought, and so, in order to make the service tangible, sellers show evidence of its quality. In the case of a popular Italian eatery in Los Angeles, the owner has placed signed photographs of celebrities that frequent and enjoy the cuisine that is offered by the restaurant. In that way, the perception of good taste and high standards that is projected by the celebrity endorsement shines a positive light on the menu and subsequent patronage of the customers.
Service inseparability simply means that the provider and the buyer are intricately linked and must be present in order for the service to be rendered. In the case of a soda pop machine, the user interface, mechanical moving parts and soda transfer all are connected in order to deliver the product to the customer after they drop change into the coin slot. Without the machine, the soda cannot be obtained.
Service variability is determined by the particular entity or circumstances surrounding the service. Let’s take the example of a shoe shiner posted next to the restroom facilities of a casino at a hotel resort in Las Vegas. The shiner may be an older gentleman with a great deal of personal experience who is able to both shine the shoes and tell a great story at the same time. Thus, the value of being entertained is added to the value of the shoeshine. Meanwhile, a competitor at another casino may be a young recent immigrant who is unable to speak fluent English. Thus, the quality of the experience varies depending on which casino and shiner one chooses.
Service perishability describes the characteristic that services must be rendered on the spot and cannot be stocked for a later time. If one were to call a taxi cab to arrive and take one to the airport, one is by necessity obligated to be present to get inside the cab and ride to the airport. If one is not present, they cannot be taken to another location. When demand is inconsistent this would causes the taxi company to cut back on staff, equipment, and/or lower prices.