3. Characteristics of Services (IHIP) 🟢 IHIP Model: Services have four unique characteristics that differentiate them from products. Characteristic Explanation Example Intangibility Cannot be touched, stored, or seen before use Insurance policy, Coaching class Heterogeneity Varies from provider to provider or even customer to customer Salon experience, Doctor consultation Inseparability Produced and consumed simultaneously Restaurant meal, Taxi ride Perishability Cannot be stored for future use An empty seat on a flight

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Welcome to our exploration of service characteristics. Services have four unique features that distinguish them from physical products. These are captured in the IHIP model: Intangibility, Heterogeneity, Inseparability, and Perishability. Let's examine each of these characteristics in detail. Let's examine the first two characteristics. Intangibility means services cannot be physically touched, stored, or examined before purchase. Think of an insurance policy or coaching class - you cannot hold them in your hands. Heterogeneity refers to the variability in service delivery. The same service can differ significantly between providers or even between different experiences with the same provider, like varying salon experiences or doctor consultations. Now let's explore the final two characteristics. Inseparability means that services are produced and consumed at the same time. The provider and customer must be present together, like during a restaurant meal or taxi ride. Perishability refers to the fact that services cannot be stored or inventoried. An empty airline seat or unused hotel room represents lost revenue that cannot be recovered - the service opportunity perishes if not used when available. Let's compare services with products to understand the significance of the IHIP model. While products are tangible, standardized, produced separately from consumption, and can be stored, services exhibit opposite characteristics. This creates unique business challenges including quality control difficulties, critical capacity management needs, essential customer involvement, and revenue timing constraints. Understanding these differences is crucial for effective service management and marketing strategies. To summarize what we have learned about service characteristics: The IHIP model provides a framework for understanding how services differ from products. Intangibility and heterogeneity create unique quality management challenges. Inseparability emphasizes the importance of customer-provider interactions. Perishability highlights the critical need for effective capacity management. Mastering these concepts is essential for developing successful service strategies and operations.