Page 22 - MARKETING & PUBLIC RELATIONS EBOOK IC88

 Perishability is less if the service facility is mobile. Advertisements and newspaper
on the internet being less mobile are more perishable. But in relation to those who
browse, they are not perishable at all.
 The demand for the service has to be consistent with supply, not merely on an
average over a period of time, but all the time.

F. Other features
 Many services are tied up with tangible goods. Ownership of the goods does not
pass from service provider to the buyer.
 But service business are not low tech. one of the fast growing areas of service
segment relates to computers.
 Service business has high labour impact, but necessary high in total output. The
quality, determined in terms of customer satisfaction.
 Barrier to entry are those obstacles that make it difficult for potential new entrants
from disturbing the existing market structure.
 Some of the barriers are like cost, initial capital requirements, scale, product
differentiation, legal.
 By and large, the barriers to entry in service are low. In other words the chances of
new competition are high. The capital investements are high in soe services like
hospitability, transport, etc.
 In insurance, in India, till 2000, there was a legal barrier to start an insurance
company, but there was no barrier to become an insurance consultant to recover
claims.
 New technologies – the internet poses new challenges to traditional service
provders. E – Commerce companies have “disrupted” the retail trade, by making
displays and offers without constraints of time or place.
 A development of interest to insurance business is called financial technologies or
fintech; many start ups are into this business which is likely to disrupt radically the
business models of banking and asset management.
 Fintech services include payments and advisories to provide to private and
corporate retail banking custoers as well as for insurance, maily non life insurance.
 A study made by google and the Boston consulting group in 2016 has estimated that
the Indian digital payments market is likely to grow 10 times in the next four years.

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