Page 540 - Business Principles and Management

Chapter 19 • Product Planning and Production Management

FIGURE 19-3 The Differences Between Products and Services

PRODUCTS

Tangible

Available whenever the purchaser wants them

Quality depends on the manufacturing process but
should not vary significantly among batches of the
same product

Can be stored for later use

SERVICES

Intangible

Available only from the person providing them

Quality depends on the skill of the provider and
may vary from provider to provider

Cannot be stored

facts
the availability and the skill of the person performing the service. If a business or &
individual is unable to deliver a service, customers must go without. Trading in
the stock market using the Internet has become popular as investors bypass tradi- figures
tional stockbrokers. However, in several instances, a business offering Internet
stock trading had serious hardware or software problems that prevented cus-
tomers from accessing accounts to buy and sell stocks. The Ritz-Carlton Hotel Company
is the only two-time recipient of
QUALITY The quality of the service depends on who provides it as well as where the Malcolm Baldrige National
and when that service is provided. Removing 10 inches of snow from a parking Quality Award in the service
lot may be more effective with a tractor and a dump truck than with a small snow category. Their strategy is to
blower. A hairstylist who has not completed training recently may not be able to achieve 100 percent customer
offer the latest hair designs. A service provider who is tired, untrained, or uncon- loyalty. The company set a tar-
cerned about the customer may not provide the same quality of service each time. get of “defect-free” experiences
Understanding these factors makes it easier for a business to control the quality of for guests, implementing a sys-
services and ensure that customers get the same quality time after time. tem to chart progress toward
elimination of all customer
TIMING A service cannot be stored or held until needed. After a movie starts, it problems—no matter how mi-
is no longer available in its complete form until it is replayed. If the courts in a nor. Any employee can spend
tennis club are full, no one else can play tennis at that time. Likewise, the owner up to $2,000 to immediately
of a taxi company must have cars and drivers available at all times, even if no correct a problem or handle
one is using a taxi at a specific time. a complaint.

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