Retail Observer

RETAILOBSERVER.COM NOVEMBER 2018 64 S E R V I C E D E P A R T M E N T P roducts and services are two concepts that, while closely aligned, are very different. While it is true that most products have an element of service in them, the way we market them is very different. Let's define the two concepts now. PRODUCTS When selling a new washing machine to your customer you more than likely will ask what features they want, what color they like and what capacity they need. In this case you are describing the actual specifications of the product and how it will relate to their needs and wants. Products are often tangible objects or things. Their value lies in their ownership and their use. There is normally a transfer of title and the owner can touch and feel the product they just took ownership of. Products can be standardized as is evident when viewing the assembly line at the factory. With products, quality control is possible and warehousing and stockpiling the inventory is necessary to meet the needs of the customer. SERVICE A service is the production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need. While a product is something that can be measured and counted, a service is less concrete and is the result of the application of skills and expertise towards that identified need. Manufacturer's warranties and extended service contracts are prime examples. The new washing machine that your customer just purchased is the tangible product, but the warranty and the extended service contracts are intangible. SERVICE AS A PRODUCT Service is a product at the instant of delivery. Acts and deeds cannot be physically processed, and once provided the service cannot be withdrawn or returned. Service is usually delivered to the customer by people beyond the immediate influence of management. The person receiving the service has nothing tangible, and its value depends on the customer's personal experience as there is no transfer of title. The experience cannot be sold or passed on to a third party, and therefore it is particularly vulnerable to a lack of managerial oversight. THE SERVICE PROVIDER The service provider is responsible for the quality of the service. The quality of the service cannot be separated from the service provider, and because service is difficult to standardize it does vary in quality. The overall capacity of the service provider is dependent on the amount of available labor hours which cannot be warehoused or stockpiled. In order to be recognized as a quality service provider, quality assurance must happen before production rather than after, thus the need for continued training. To put it all together, delivery of a service requires human interaction. The buyer and the seller must come in contact in some relatively personal way, as when your technicians enter the customer's home. The customers, who are the receivers of the service, have predetermined expectations that are important to their satisfaction. Their perception of the service and its value is largely subjective. Customers are not all the same and their perception of the quality of the service product will differ. The trick is to develop a set of common experiences that will be perceived as quality in the majority of cases. The final product should be a positive outcome that your customers derive out of dealing with you and the services you offer them. Your job as a service provider is to make the customer feel that they would have to be a complete fool to do business with anyone else but you, regardless of price. PRODUCT VS. SERVICE RO Ralph Wolff, Industry Relations, PSA Certified Service Center www.certifiedservicecenter.org

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