Non-ownership Characteristic of Services
From a marketing perspective, services, unlike goods, do not involve transfer of ownership. If customers do not receive ownership when they purchase a service, then what are they buying? One view is that customers gain access or rental of resources for a period of time such as a hotel room for the night or a seat on an airplane. Service industries share their resources among customers by allocating the use of them. Customers do not purchase an asset but, instead, have use of the asset for a specific time, whether it is the use of human labor (e.g., dentist), technology (e.g., cellular network), or a physical asset (e.g., theme park). Notice that in each example, customers often share the service provider’s asset concurrently with other customers. Table 2.2 lists the five classes of non-ownership services with examples.
Sharing resources among customers presents management challenges. In the case of goods rental, convenience of a rental office location for pickup and drop-off is essential. Car rentals, for example, are found at airports. However, Enterprise is an exception, because it began delivering vehicles to the local population instead of catering primarily to travelers. Maintenance of the rental good and returning the good to acceptable condition between customer rentals is a necessary and ongoing activity. In the case of place and space rental, customers are able to participate in the economies of scale derived from sharing a larger space with many users while enjoying some degree of separation and privacy. For airlines, the extra large seats and leg room in business class partially explains the relatively high ticket price. For any shared facility, housekeeping is a routine activity performed between periods of customer usage (e.g., trash pickup upon landing
From a marketing perspective, services, unlike goods, do not involve transfer of ownership. If customers do not receive ownership when they purchase a service, then what are they buying? One view is that customers gain access or rental of resources for a period of time such as a hotel room for the night or a seat on an airplane. Service industries share their resources among customers by allocating the use of them. Customers do not purchase an asset but, instead, have use of the asset for a specific time, whether it is the use of human labor (e.g., dentist), technology (e.g., cellular network), or a physical asset (e.g., theme park). Notice that in each example, customers often share the service provider’s asset concurrently with other customers. Table 2.2 lists the five classes of non-ownership services with examples.
Sharing resources among customers presents management challenges. In the case of goods rental, convenience of a rental office location for pickup and drop-off is essential. Car rentals, for example, are found at airports. However, Enterprise is an exception, because it began delivering vehicles to the local population instead of catering primarily to travelers. Maintenance of the rental good and returning the good to acceptable condition between customer rentals is a necessary and ongoing activity. In the case of place and space rental, customers are able to participate in the economies of scale derived from sharing a larger space with many users while enjoying some degree of separation and privacy. For airlines, the extra large seats and leg room in business class partially explains the relatively high ticket price. For any shared facility, housekeeping is a routine activity performed between periods of customer usage (e.g., trash pickup upon landing
for an airline flight and changing linen upon departure of a hotel guest). The challenge facing management of labor and expertise resources is, first, keeping the resource skill current through training and, second, avoiding idle periods when hours are not billable. Management of queues and crowd control is a challenge for managers of physical facilities that are shared by a large population of customers. Disney, for example, has made a science of controlling waiting lines using multiple techniques that include diversions and allowing guests to reserve time slots for rides hours in advance. Uptime is critical for network services because customers depend upon and expect access 24–7 (24 hours per day, 7 days per week). Thus, continuous availability is essential, but because usage varies depending on time-of-day and day-of-week, pricing for the service must be creative and flexible.
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