consumer buying behavior research

Differences between a Product and a Service

Although a service may be viewed as a product and vice versa, the two are distinguished by several characteristics. Services are characterized by the following attributes (Johansson, 2009):

· intangibility—You cannot easily touch a service. Services are difficult to monitor at borders and hard to assess for customs duty.

· heterogeneity—A service is not exactly the same each time, especially personal services. Services are less standardized than products and quality varies.

· inseparability—Services are produced when they are consumed. Service quality depends on situation and context.

· perishability—You cannot store a service, unless the service is embodied in a product (e.g., a DVD or an ATM).

The entry barriers in global markets for services are greater than for products, but exit barriers are lower (Johansson, 2009):

· Local regulations vary widely across countries.

· Local service businesses are typically protected.

· Cultural barriers tend to be higher.

· Intangibility makes trade monitoring difficult.

· Free-trade agreements are hard to complete and enforce.

· Without trade agreements, governments have no incentive to make regulations more homogeneous.

Quality can be hard to define when it comes to global services (Johansson, 2009):

· Since services are intangible, service quality is difficult to quantify.

· Different cultures have different habits and preferences, and therefore have different definitions of service quality.

· Culture strongly affects perceived service quality and customer satisfaction.

· What is considered high service quality in one country may not necessarily be perceived as high in another