Intangibility

Face-Off! Synergizing Goods as Services

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In marketing, we face a very important question; “can service-based operation be more effective than a goods-based manufacturing model”? 40 – 50 years ago, marketing concentrated on goods-based manufacturing model and its perspective is to satisfy the demands of consumers by offering them tangible products. But in our modern time, a service-based operation should be more dominant for it involves the whole process of satisfying the consumers and at the same time they proactively contribute to the development of the whole structure of a more effective and efficient marketing approach. Goods are also services, what consumers buy is the long term benefits from tangible or intangible goods and services.

Let me break down the reasons. According to Stephen Vargo and Robert Lusch, there are four myths in service marketing that divides goods from services and they are; Intangibility, Heterogeneity, Inseparability, Perishability. It is said that when we talk about Intangibility, services lack the tactile quality of goods but in reality services often have tangible results because in a customer’s perspective they buy activities that render services and things also render services. The function of a good is to serve as a supply for a service to materialize. The idea is that a thing will remain useless unless it offers a valuable service and function to the consumer.

The other myth is about heterogeneity where it is said that services cannot be standardized. But really, who will layout the judgement, is it the manufacturer or the consumers? The standards are perceived by the consumers given the fact that goods are homogenous by nature; consumers will be the ones who will judge it according to how they will be satisfied because what they are looking for is the service rendered by that determinate good. Even though marketers offer homogenous or standardized things to consumers, not every one of them will have the same perception therefore these things or goods are services in because consumers have different perceptions on how they think they will be satisfied – each individual have unique judgement. There are similarities between the myths heterogeneity and inseparability. The way that I understand inseparability, consumers are always involved in the process and production of what-should-be value of tangible goods. If consumers interact with the tangible goods, they will be able to perceive its value and to the extent that how that determinate thing will render service from them. We must put this in our mind, “the goal of service marketing is to maximize consumer involvement”. Examples of which are their feedbacks and cooperation to fully experience what has been offered. When there is an involvement goods or services will be further innovated.

The last myth is about perishability. It is true that tangible goods are perishable, fruits rot, cars rust and will lose its manufactured value but not in service marketing for it gives long-term benefits to consumers. The idea in this myth is said to be that services cannot be produced ahead of time and be inventoried. The truth is that both tangible and intangible goods can be inventoried and for service it is measured again by the long-term benefits from the rendered service itself. Who would want to put tangible products in an inventory anyway? That only means there is an unbalanced distribution in the logistic cycle of the operation. In addition to this myth, tangible products have no value when manufactured, it is only created when it come in contact with consumers. Again consumer involvement is much needed because the focus is not on the products but on the customer’s value creating processes.

Everything is about service marketing, may it be tangible or intangible. Physical goods only become an element in rendering services. I think it is time that we need to embrace service marketing and declare goods-based manufacturing model as an outdated strategy in marketing. What it can do is to help future marketing people to choose the right steps in satisfying the demands of the customers. Remember this: benefits from goods are obtained by use of these goods—goods are merely the distribution vehicle or channel for service provision; they are appliances (Vargo and Lusch 2004). Keep in mind that even if goods and services differ in some ways, the synergy of these two will lead to the success of a company’s goals.

In marketing, we face a very important question; “can service-based operation be more effective than a goods-based manufacturing model”? 40 – 50 years ago, marketing concentrated on goods-based manufacturing model and its perspective is to satisfy the demands of consumers by offering them tangible products. But in our modern time, a service-based operation should be more dominant for it involves the whole process of satisfying the consumers and at the same time they proactively contribute to the development of the whole structure of a more effective and efficient marketing approach. Goods are also services, what consumers buy is the long term benefits from tangible or intangible goods and services.

Let me break down the reasons. According to Stephen Vargo and Robert Lusch, there are four myths in service marketing that divides goods from services and they are; Intangibility, Heterogeneity, Inseparability, Perishability. It is said that when we talk about Intangibility, services lack the tactile quality of goods but in reality services often have tangible results because in a customer’s perspective they buy activities that render services and things also render services. The function of a good is to serve as a supply for a service to materialize. The idea is that a thing will remain useless unless it offers a valuable service and function to the consumer.

The other myth is about heterogeneity where it is said that services cannot be standardized. But really, who will layout the judgement, is it the manufacturer or the consumers? The standards are perceived by the consumers given the fact that goods are homogenous by nature; consumers will be the ones who will judge it according to how they will be satisfied because what they are looking for is the service rendered by that determinate good. Even though marketers offer homogenous or standardized things to consumers, not every one of them will have the same perception therefore these things or goods are services in because consumers have different perceptions on how they think they will be satisfied – each individual have unique judgement. There are similarities between the myths heterogeneity and inseparability. The way that I understand inseparability, consumers are always involved in the process and production of what-should-be value of tangible goods. If consumers interact with the tangible goods, they will be able to perceive its value and to the extent that how that determinate thing will render service from them. We must put this in our mind, “the goal of service marketing is to maximize consumer involvement”. Examples of which are their feedbacks and cooperation to fully experience what has been offered. When there is an involvement goods or services will be further innovated.

The last myth is about perishability. It is true that tangible goods are perishable, fruits rot, cars rust and will lose its manufactured value but not in service marketing for it gives long-term benefits to consumers. The idea in this myth is said to be that services cannot be produced ahead of time and be inventoried. The truth is that both tangible and intangible goods can be inventoried and for service it is measured again by the long-term benefits from the rendered service itself. Who would want to put tangible products in an inventory anyway? That only means there is an unbalanced distribution in the logistic cycle of the operation. In addition to this myth, tangible products have no value when manufactured, it is only created when it come in contact with consumers. Again consumer involvement is much needed because the focus is not on the products but on the customer’s value creating processes.

Everything is about service marketing, may it be tangible or intangible. Physical goods only become an element in rendering services. I think it is time that we need to embrace service marketing and declare goods-based manufacturing model as an outdated strategy in marketing. What it can do is to help future marketing people to choose the right steps in satisfying the demands of the customers. Remember this: benefits from goods are obtained by use of these goods—goods are merely the distribution vehicle or channel for service provision; they are appliances (Vargo and Lusch 2004). Keep in mind that even if goods and services differ in some ways, the synergy of these two will lead to the success of a company’s goals.

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