Intangibility
Services are actions and hence they are intangible. Due to this it is not possible to stock services and hence fluctuations in demand becomes difficult to manage. Hotels have same number of rooms all through the year but the customers requiring the room are always varying with some months seeing very few customers while other months seeing a rush of customers. Further services cannot be patented and any new concept can be easily copied by competitors. These cannot be readily displayed or easily communicated, and hence it will be difficult for the consumers to assess the quality. This also creates a problem for what to include in advertisements and promotional materials. Further the actual cost of “unit service” is difficult to determine and hence pricing becomes difficult.
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