1. Choose one product and one service. Use them to describe the basic differences between products and services described in the reading. You can approach this by describing a single brand or an entire industry. Your choice.
The basic differences between goods and services do the job of ensuring that they are separate to be able to easily determine the importance and individuality of each one. In order to describe the difference we will use a new Ford car and a Jiffy Lube oil change as examples. The first difference is that customers do not obtain ownership of services. You wouldn’t go to an oil change with the ability to own the oil and the employees, but you would take the car that you bought to own and pay money to receive an oil change to keep good maintenance on the car. The second difference is that service products are intangible performances, which means that with an oil change you don’t receive anything physical along with the car, you just receive the service of someone changing the oil in your car. The third difference is that there is greater involvement of customers in the production process. In terms of Ford cars, this means that you, the customer, determine what changes the company makes to the next line of vehicles based on reviews, surveys, and commentary that you provide about past experiences. The fourth difference is that other people may form part of the product. This goes hand in hand with the previous difference in the sense that your commentary pushes Ford to make changes as well as having their own employees create and/or build an important aspect of the car. The fifth difference is that there is greater variability in operational inputs and outputs, which means that developing and producing completely different cars is a lot easier than completely changing how to change the oil in a car. The sixth difference is that many services are difficult for customers to evaluate. This is because the evaluation for services comes after the service is complete unlike goods where the evaluation process can come even before purchase. The seventh difference is that for services there is typically an absence of inventories, and this is due to the fact that there is no physical object with a service. You could easily keep track of Ford car parts or even physical cars in an inventory, but it wouldn’t make sense to keep track of oil changes in the same manner. The eighth difference is that for services the time factor is relatively more important. This is because customers desire services to happen quickly so that their time is not wasted, unlike products, which are typically readily available. The last difference is that for services, delivery systems may involve both electronic and physical channels. This means that if you were to use Jiffy Lube to have an oil change, you could make purchases online which incorporates the electronic channel or make purchases on location, which incorporates the physical channel. All in all, the true difference between a good and a service is that goods are physical objects, like the Ford car, while services are actions, like a Jiffy Lube oil change.
2. Eight components of service management are described in the reading (please note that they are referred to as 8Ps--these are different than the 7Ps of service marketing we discussed briefly on Monday). Consider the service you chose in the previous question through the lens of these eight components and describe how they apply to each.
For the eight components of integrated service management we will continue to use the Jiffy Lube oil change service to describe each component.
For product elements, Jiffy Lube offers more than just the oil change feature in their service. They also offer inspections, tire services, and brake services in order to cater to all aspects of car maintenance and create value for their customers.
For place and time, Jiffy Lube delivers their service physically as car maintenance cannot be done electronically, and performs as quickly as possible so as to not inconvenience their customers, which creates loyalty to their brand.
For process, Jiffy Lube ensures that their process for car maintenance is done efficiently and effectively, and they do this through hiring educated and skilled workers plus extensive training.
In terms of productivity and quality, Jiffy Lube through its employees work to have a productive atmosphere in order to product quality work that customers want. In this way they are able to keep their costs at a minimum and generate customer loyalty at the same time.
In terms of people, Jiffy Lube relies on customer interaction in order to cater to customer’s specific needs. These interactions also help the company to understand what they are doing right and what changes need to be made to provide the best service to their customers.
For promotion and education, Jiffy Lube ensures that they are able to educate current and future customers through advertisements, which helps their customers understand what they provide and generate loyalty through brand familiarity.
In terms of physical evidence, Jiffy Lube makes sure to stand out with their signature logo and building appearance, keeping their identity universal no matter where they are located.
Lastly for price and other costs of service, Jiffy Lube ensures reasonably low prices that vary depending on the specific service provided at the time.
3. The reading introduces value, values and ethics as particularly important in the sphere of services. Do you agree that the fundamental nature of services described in the chapter amplify the importance of these three factors in services (versus products). Why or why not?
Yes, I agree that the fundamental nature of services described in the chapter amplify the factors because a service has a huge impact in terms of representing and selling that brand. If Jiffy Lube didn’t value their customers, there would be no loyalty and that would not keep the company afloat. If they didn’t not provide an ethical service, they would not remain afloat. Value and ethics are so important for that reason because services cannot make money in the same manner as selling goods would. It is through the relationship and loyalty of their customers that determines how well they do as a company.
