Products are tangible and Services are intangible in nature. Intangibility of services is derived from the fact that you cannot see or touch a service. A service is made and delivered on spot and hence it cannot be measured as easily as a tangible product.
Intangibility of services can be explained by a clear comparison between restaurants and soaps. Soap has a clear metric like 500 grams of soap and it is something which you can touch and feel and you know what the exact cost of the product is and what it has to be priced at.
A service like a restaurant is always varying because you pay as per the service that you receive. You cannot taste the food in a restaurant and then order the food. You have to first order it and then hope that it is good in taste. Thus, unlike products, services cannot be touched or felt beforehand. They have to be first ordered and then they become tangible.
For example – You pay for an online ticket but you have no idea how your travel will be. At best, you rely on the promise of the airline that your travel will be an experience to remember. But again, there is nothing tangible about that promise.
As a marketer, due to the intangibility of services, you face a lot of problems in services marketing. You will have to add tangible elements to your service to make your marketing possible. For example – in the restaurant example above, you can have a good ambiance, good cutlery and thereby make the customer feel good so that his experience there is excellent. At the same time, you have to ensure that you deliver good food thus adding a lot of tangible elements to an otherwise intangible service.
Marketing an intangible product becomes even more difficult in other examples like coaching classes. The ability of a teacher to teach a student is almost impossible to market. How can you grade one teacher against another, because there are thousands of teachers out there and success of teaching also depends on the ability in students to learn.
Thus, in such a case, you have to market students results to bring attention to the coaching classes and the teachers. You need to show the excellent results which the coaching classes has given because the service in itself is intangible.
Another problem due to intangibility of services is that services cannot be stored. If you are a resort owner, you have the same rooms across the year. However, you are sure to be occupied during the peak season whereas in other seasons your inventory of rooms will go waste. Due to its intangible nature, you cannot reduce the inventory of a service as you wish.
The intangibility of services is the dominant characteristics of services and the biggest challenge for marketers as well as service product owners.
There are 5 main characteristics of intangibility of services.
1) Service cannot be touched
2) There is no precise standardisation method for services
3) Services cannot be patented
4) There are no inventories in services
5) The consumer is part of the service process because he consumes the service. Thus, either the service must go to the customer or the customer has to come to the service.
Overall, intangibility of services is a challenged being faced by many marketers, and marketers, being smart as they are, have always countered this problem by being more and more innovative so that they can differentiate the service from the competitors and at the same time attract more customer and build better value for their service products.