Services typically have several distinctive characteristics or features from goods retailing. These are intangibility, perishability, inconsistency, fluctuation and consumer dependent. A service is anything which can be offered to the customers in order to satisfy their need, wants and desire and intangible, inseparable, variable and perishable in nature.

In India, service jobs now account for 70 per cent of all jobs and 65 per cent of gross domestic product. The peculiar characterised services create challenges and opportunities to the service marketers.

Some of the characteristics of service marketing are as follows:- 1. Service is a Performance 2. Service do not involve any ownership transfer 3. Intangibility 4. Variability 5. Perishability 6. Need is the Origin

7. Natural Shift 8. Strongest Area for Growth 9. Deregulation and Service Marketing 10. No Obsolesce 11. Consumption Inseparability 12. Simultaneity 13. Inconsistency 14. Fluctuation 15. Consumer Dependent 16. Ownership 17. Heterogeneity 18. Pricing of Service.

Characteristics of Service Marketing: Intangibility, Variability, Perishability, Natural Shift, Inseparability and Many More…

6 Important Characteristics of Service Marketing – Service is a Performance, Services do not involve any ownership transfer, Intangibility, Inseparability, Variability and Perishability

What exactly are the characteristics of a service? In fact, many organizations do have service elements to the product they sell, for example McDonald’s sell physical products i.e. burgers but consumers are also concerned about the quality and speed of service, are staff cheerful and welcoming and do they serve with a smile on their face?


Keeping in mind the above criterion the following are the characteristics of services:

Characteristic # 1. Service is a performance:

While products are produced, services are performed. In most cases, services are totally unconnected to any physical product.


Characteristic # 2. Services do not involve any ownership transfer:

Usually, a service does not result in the ownership of anything. In other words, unlike in product marketing, there is no title/ ownership transfer. Another outcome of simultaneous production and consumption is that service producers find themselves playing a role as part of the product itself and as an essential ingredient in the service experience for the consumer.

When you buy a product you become its owner -be it a pencil, book, shirt, refrigerator, or car. In case or service, you may pay for its use but you never own it. In case of service the payment is not for purchase, but only for the use or access to or for hire of items or facilities.

Characteristic # 3. Intangibility:


Unlike physical products, services are intangible; they cannot be seen, touched, or smelt. Also, the consumer cannot sample a service in advance. Accordingly, it becomes difficult for the consumer to judge a service before it is bought; he cannot know its exact outcome in advance.

In other words, you cannot hold or touch a service unlike a product. In saying that although services are intangible the experience consumers obtain from the service has an impact on how they will perceive it. What do consumers perceive from customer service, the location, and the inner presentation of where they are purchasing the service?

Characteristic # 4. Inseparability:

Inseparability is the next unique feature of services. Services cannot be separated from the service providers. A product when produced can be taken away from the producer. However a service is produced at or near the point of purchase.


Visiting a restaurant, you order your meal, the waiting and delivery of the meal, the service provided by the waiter/rest is all a part of the service production process and is inseparable, the staffs in a restaurant are as a part of the process as well as the quality of food provided.

In fact services are marked by two kinds of inseparability:

i. Inseparability of production and consumption

ii. Inseparability of the service from the person who possesses the skill and performs the service.


Characteristic # 5. Variability:

Services are also marked by variability or heterogeneity. This is so because of three reasons- First, inseparability of the service from the provider leads to some variability. Second, services are highly people sensitive. Third, in services, the effect varies depending on when and where the service is provided.

Characteristic # 6. Perishability:

Services are perishable as well. They cannot be stored. This is so because of the fact that services are produced and consumed simultaneously. There is no inventory in case of a service. Services last a specific time and cannot be stored like a product for later use. If traveling by train, coach or air the service will only last the duration of the journey. The service is developed and used almost simultaneously. Again because of this time constraint consumers demand more.

Service Marketing Characteristics – Need is the Origin, Natural Shift, Strongest Area for Growth, Deregulation and Service Marketing and No Obsolescence

1. Need is the origin- Service marketing concepts and strategies have developed in response to tremendous growth of service industries.


2. Natural shift-

It is evident from the above diagram that as people’s income increases, their demand for food i.e. the main product of agriculture reaches its natural limits, and they begin to demands relatively more industrial goods. At the same time, as income continues to rise, needs of people become obviously less material and they begin to demand more and more services, in all areas like health, education, entertainment and many more.


3. Strongest area for growth- Service marketing is not only most sought marketing area but, it is the strongest area for future growth because of natural shift in tendency of people towards services rather than manufacturing.

4. Deregulation and Service Marketing- Deregulated industries and professional services is the result of specific demand for service marketing concepts. Deregulatory moves by statutory or governments agencies have affected service industries such as airlines, entertainment, banking & telecommunications.

5. No obsolescence- Services are intangible hence are less subject to obsolescence than goods. It is the prime feature of service marketing, because it makes decisions different than ordinary marketing decisions involving manufactured goods.

4 Major Characteristics of Service Marketing – Intangibility, Service Variability, Perishability and Production/Consumption Inseparability

1. Intangibility:

When product is purchased, something visible to the eye is received in return of money. However, when service is received nothing tangible is received education, travel entertainment etc.

Thus market must look for the following points:


a. Development of tangible access of service to attract costumer.

b. Focusing on service provider than service.

2. Service Variability:

Manufacturing industry is more capital intensive, while service industries are more of labor intensive. This is the differentiating factor of service & manufacturing sector. One type of service can be different or variable in different places.

3. Perishability:

Services are most perishable than anything even food items. Because of no inventory, services have a much more difficult time regulating supply to meet demand, because, demand is rarely steady or predictable enough to avoid service Perishability.


4. Production / Consumption Inseparability:

Production of goods is the first process and later part is of consumption. However services are consumed and produced at the same time .e.g. Restaurant services are produced after arriving of customer.

Top 5 Characteristics of Service Marketing – Intangibility, Inseparability, Variability, Perishability and Simultaneity

Service Marketing have five major characteristics.

These are as mentioned below:

1. Intangibility – Services are intangible. That is they cannot be seen, tasted, felt or smelled before they are bought. Thus a person on his first flight will have to buy the ticket and sit in the plane, and then only will he experience the “Feel” of flying.

Similarly a person going to a Psychiatrist’s office cannot predict the outcome, unless he takes an appointment and attends some sittings. This is very unlike products, which you can touch; feel, smell and even taste both before and after you buy. A service by nature is an abstract phenomenon. It is not a physical object. It has a mental connotation.


2. Inseparability – Another characteristic of service is the inseparability of the client and provider of service. There has to be a provider of service as well as a user of service. Services are typically produced and consumed at the same time. Like products they cannot be manufactured, stored and then sold as and when there is a demand.

Thus dentists, doctors, dancers and musicians create and offer services at the same time. A person who is the provider of service can sell his service only to a limited number of people in a day. However, an organisation that is a provider of service can appoint agents to sell the service. Example- insurance agents, travel agents etc.

3. Variability – Another characteristic of services is that they are highly variable. The quality of the service provided will differ depending upon who provides them and when and where are they provided. Even the same provider will give a different service from time to time depending upon the situation.

For example, an entertainment programme of Lata Mangeshkar would be different from the one given by Sonu Nigam or Asha Bhosle. Similarly, an open-heart surgery done by a heart specialist will differ from patient to patient depending upon the energy level and mental makeup of the surgeon at the time of each surgery and also on the seriousness of the surgery.

4. Perishability – Services cannot be stored. Nor can they be carried forward. If a service is not used today, it is lost forever. They are highly perishable. Unutilised services render economic losses. A ship, plane or warehouse loaded to half its capacity, a hotel with rooms vacant, a theatre with empty seats during the airing of a movie, are all examples of services which have been lost forever. Thus services not utilised when they are produced, perish.

5. Simultaneity – Services are rendered and consumed during the same period of time. As soon as the service consumer has requested the service (delivery), the particular service must be generated from scratch without any delay and friction and the service consumer instantaneously consumes the rendered benefits for executing his upcoming activity or task.


Thus intangibility, inseparability, variability, simultaneity and perishability are the five main characteristic features of services.

Distinctive Characteristics or Features of Service Marketing – Intangibility, Perishability, Inconsistency, Fluctuation and Consumer Dependent

Services typically have several distinctive characteristics or features from goods retailing. These are intangibility, perishability, inconsistency, fluctuation and consumer dependent.

These features are detailed below:

1. Intangibility:

They are generally intangible, i.e., they cannot be sampled, tasted, touched, seen, or felt before being purchased. You can normally touch and feel goods you want to purchase. But assistance provided or maintenance of car is difficult to touch and feel. Evaluation of quality is also difficult. Some efforts may be done for evaluation of services using the scale but it may be high subjective, and vary from person to person, unless the instrument is administered under expert guidance.

2. Perishability:


They are perishable, i.e., they cannot be stored for future sale. For example vacant hotel accommodation, vacant seats of a flight, not rendered haircut, etc. cannot be stored for future consumption. Perishability creates a problem for service retailers; they cannot stock pile services, like they do with goods.

Goods retailers stockpile goods for peak demand. The same cannot be the case with services. You can see long queues in a hair-cutting saloon on Sunday mornings, waiting for haircuts.

3. Inconsistency:

They are usually not standardised and inconsistent, though many service retailers have tried to standardize their offerings. It is difficult to standardize services. For example how can we standardize the fitting/ stitching of two different tailors or the hair cutting of barbers cut provided by two different salons.

Even within a salon, two different barber will provide different level/ quality of services. The same is true for coaching and training classes, counselling, and other services.

In addition, service providers may experience an off day in which their performance is not up to par. You just hope that when you are having haircut, the barber is in the right frame of mind. Hiring the best people, developing standardized procedures, and training service providers intensively, are methods retailers use to minimize inconsistent service.

4. Fluctuation:

They usually have fluctuating demand, e.g., rush in summer for train reservations, or crowds at restaurants on Sunday evening, etc. Fluctuating demand creates problems for service retailers, like non-stockpiling of services. This leaves many customers unsatisfied. You must have experienced this dissatisfaction when you do not get train reservations in summer.

5. Consumer Dependent:

They are consumer dependent, i.e., people offering them have a much crucial role to play in customer satisfaction than goods retailing. This unique feature of services creates challenges for retailers. While customers can return damaged merchandise to retailers, service providers who fail to satisfy their customers often do not get a second chance.

A dissatisfied customer never comes back. How many times did you visit a restaurant after you received a bad meal or poor service? Thus, it is critical for service providers to get it right the first time. Service retailers try to avoid service failures by hiring the right people, training, and motivating them well.

Of course, service failures will still occur. When they do, service retailers must be certain that steps are taken to reduce customer dissatisfaction.

Many organizations that offer services to customers such as banks, hospitals, doctors, lawyers and other consultants do not consider themselves to be retailers. But due to increasing competition, these organizations have started adopting retailing principles to attract customers and satisfy their needs.

Characteristics of Service Marketing – Intangibility, Inseparability, Variability and Perishability

A service is anything which can be offered to the customers in order to satisfy their need, wants and desire and intangible, inseparable, variable and perishable in nature.

In India, service jobs now account for 70 per cent of all jobs and 65 per cent of gross domestic product.

More and more market offerings now contain a service component, both to meet the needs of the targeted customer segment and to create a distinctive differentiation for competitive reasons.

“A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.” – ‘The American Marketing Association’

1. Intangibility,

2. Inseparability,

3. Variability, and

4. Perishability.

Characteristic # 1. Intangibility:

Services are intangible in nature. Unlike physical products, services cannot be seen, felt, heard, or smelled before they are bought. A person can’t be certain about the service quality unless he/she experience it.

To reduce the uncertainty about the service quality, buyers will look for signs or other visible things associated with the service like the place, people, equipment, communication material, symbols, and price etc. These tangibles are called as the physical evidence.

The concept of “tangibilize the intangible” through physical evidence was introduced by ‘Corbore & Haeckel’ which is also called as – “customer experience engineering”.

Physical Evidence:

It includes:

(a) Place

(b) People

(c) Equipment

(d) Communication Material

(e) Price

Characteristic # 2. Inseparability:

Unlike physical products (goods), services are typically produced and consumed simultaneously. Which means that we can’t separate the services from the service provider. Therefore, it can’t be stored as well.

Thus there must be two parties one is service provider and the other is the customer who renders the service. So the service quality depends on the client-provider interaction as well.

Characteristic # 3. Variability:

The quality of service depends on the service provider, place and other factors associated with it; thus it is variable in nature.

In order to deal with the variable nature of service following steps can be taken:

(a) Recruiting the right service employees and providing them with excellent training.

(b) Standardizing the service-performance process throughout the organization.

(c) Monitoring customer satisfaction through suggestion and complaint systems, customer surveys, and comparison shopping.

(d) How do you engage with customers and elicit the feedback?

(e) Word of mouth.

Characteristic # 4. Perishability:

Perishability is the biggest problem in service sector because you can Services are inseparable in nature, so it can’t be stored by the service provider. The biggest challenge a marketer faces is to deal with the fluctuating demand of service because of perishability. There are supply and demand management techniques which help the marketer to deal with same.

5 Major Characteristics of Service Marketing that Affect the Design of Marketing programs

Services have four major characteristics that greatly affect the design of marketing programs:

1. Intangibility

2. Variability

3. Inseparability

4. Resulting Marketing Implications

5. Perishability

Characteristic # 1. Intangibility:

Services are performances or actions which cannot be seen or touched, it can only be experienced. Intangibility is one of the characteristic of services. For example, learning how to drive a car is a process where a trained driver will teach how to drive to a person who doesn’t know.

These services cannot actually be seen or touched by the trainee, although the trainee will see and touch certain tangible components of the service (car). In fact, many services are difficult for the consumer to grasp even mentally. Even after training has been completed the trainee may not fully comprehend the service performed.

Characteristic # 2. Variability:

Service providers are mostly humans not machines. So no two services will be precisely alike. For example, a dentist treat patients based on the problem they are having in a customized form. Different customers have different requirements so services vary from that point of view.

Also for example two patients are suffering from tooth decay but still the doctor treats them differently. This is because both of them will have different extent of decay and pain and both of them might be different in age, gender etc.

Characteristic # 3. Inseparability:

A product can be separated from its manufacturer but a service cannot be separated from its service provider. For example, Mysore sandal soaps are manufactured in Mysore but are sold in Delhi and Kolkata also, but, if somebody wants to have an experience of Wonder laa (waterpark) they have to come to Bangalore to experience it.

This means to say that while the services are being offered, the users of the service exists and they may also take part in the process. This may lead to regular and repeated interaction among the customers.

In other words, the services are produced, offered for consumption and are consumed at the same time.

Characteristic # 4. Resulting Marketing Implications:

Since the production and consumption of services occur simultaneously, it is challenging to estimate the demand for large number of customers. In this process, the customers pay more attention to the quality of service, after sale services and also customer satisfaction, which are all dependent on actual time or concurrent time. The real-time nature of services proves to be advantageous when it comes to offering tailor-made services for consumption of individual customers.

When the production and consumption take place simultaneously, it is very difficult to attain significant economies of scale through centralization. In order to deliver the services directly at the convenient location of the customers, the operations will have to be decentralized. Hence, simultaneous activity of production, delivery and consumption will have a positive or a negative impact on the service transaction.

Characteristic # 5. Perishability:

As service is impossible to be inventoried when it is being produced similarly it is impossible to stock it once it is bought. There are services which have product element in them but still to stock them for long is tough or worthless for customers. For example, a pizza is being delivered at home. Now, to stock that pizza for more than a few hours is worthless. Perishability refers to the fact that services cannot be saved, stored, resold, or returned.

Perishability is in contrast to goods that can be stored in inventory or resold another day or even returned if the consumer is unhappy.

5 Important Characteristics of Service Marketing

Services have five important characteristics which make them so different from physical products:

1. Intangibility:

The distinguishing feature of a service is its dominant intangible aspect.

Some intangible features as listed by J. Bateson are:

i. A service cannot be touched.

ii. Precise standardization is not possible.

iii. There is no ownership transfer.

iv. A service cannot be patented.

v. Production and consumption are inseparable.

vi. There is no inventory of services, and

vii. The consumer is a part of production process, so the delivery system must go to market or the customer must come to delivery system.

Pre-testing the service is not possible as they cannot be seen, tasted, felt, heard and smelt before they are bought. When a prospective customer cannot experience the product in advance they are asked to buy what are essentially promises of satisfaction. The buyer has to have faith in the service provider.

Client’s confidence in the service can be created by taking the help of celebrities, developing a brand name, increasing services tangibility, emphasizing services benefits rather than just describing its features.

2. Inseparability:

A service cannot be separated from its provider. This is in direct contrast to a physical product, which exists whether or not its source is present. As the provider only can render the service(s), it limits the firm’s scale of operation. To overcome this limitation the service provider can learn to work with larger groups, to work, faster or the service organization can train more service providers.

3. Variability:

In most cases human element is involved in providing service. Thus depending upon who provides them and when and where they are provided the quality of service is bound to vary. Standardization becomes a difficult task to achieve. So to ensure quality, service firms should take care to select proper personnel and give them adequate training for the work and should have a proper system to monitor customer satisfaction.

4. Perishability:

Services cannot be stored. So services not utilized are lost forever. Perish ability of service is not a problem as long as the demand for the same is steady. Number of service, providers (staff) can be planned in advance for expected demand. But it becomes a problem when it faces fluctuating demand. So, to overcome this problem, the service concerns should have proper product planning, pricing, and built-in flexibility in the organization.

5. Ownership:

In the case of goods, after the completion of process, the goods are transferred in the name of the buyer and he becomes the owner of the goods. But in case of services, we do not find this. For example a consumer can use hotel room or swimming pool, however the ownership remains with the providers.

4 Commonly Cited Characteristics of Service Marketing – Intangibility, Inseparability, Heterogeneity and Perishability

There are four commonly cited characteristics of services that make them different to market from goods:

(1) Intangibility,

(2) Inseparability,

(3) Heterogeneity, and

(4) Perishability.

(1) Intangibility:

Services are said to be intangible — they cannot be seen or tasted, for example. This can cause lack of confidence on the part of the consumer. As was apparent earlier, in considering pricing and services marketing, it is often difficult for the consumer to measure service value and quality. To overcome this, consumers tend to look for evidence of quality and other attributes, for example in the decor and surroundings of the beauty salon, or from the qualifications and professional standing of the consultant.

(2) Inseparability:

Services are produced and consumed at the same time, unlike goods which may be manufactured, then stored for later distribution. This means that the service provider becomes an integral part of the service itself. The waitress in the restaurant, or the cashier in the bank, is an inseparable part of the service offering.

The client also participates to some extent in the service, and can affect the outcome of the service. People can be part of the service itself, and this can be an advantage for services marketers.

(3) Heterogeneity:

The fact, that service quality is difficult to control compounds the marketer’s task. Intangibility alone would not be such a problem if customers could be sure that the services they were to receive would be just like the successful experiences their neighbours were so pleased with. But in fact, customers know that services can vary greatly. Different front-line personnel have different abilities. Even the same service provider has good days and bad days, or may be less focused at different times of day.

Services are performances, often involving the cooperation and skill of several individuals, and are, therefore unlikely to be the same every time. This potential variability of service quality greatly raises the risk faced by the consumer. The service provider must find ways to reduce the perceived risk due to variability. One method is to design services to be as uniform as possible — by training personnel to follow closely defined procedures, or by automating as many aspects of the service as possible.

This isn’t always a good strategy, however. The appeal of some service personnel — particularly, those involved in such expensive personal services as beauty parlour treatments or home decorating lies in their spontaneity and flexibility to address individual customer needs.

The danger with too much standardisation is that these attributes may be designed right out of the services, therefore, reducing much of their appeal. A second way to deal with perceived risk from variability is to provide satisfaction guarantees or other assurances that the customer will not be stuck with a bad result.

(4) Perishability:

The fourth characteristic of services is perishability. Perishability of a service means the service cannot be inventoried or stored. If a pair of jeans does not sell today, a retailer can store it and sell it at a later time.

This feature allows firms to mass produce goods and store them in warehouses until consumers are ready to purchase. For services, this is not possible. A US Air flight that sells only 75 of the 200 seats will lose the revenue of the 125 empty seats if the plane takes off with those seats empty. That revenue is lost forever.

Concerts and sporting events are live events in which consumers pay to see the performance. Consumers have no choice as to when or where they can watch the events unless there are multiple performances. If they want to watch, they must go to where the performance is staged, at the time it is occurring.

Again, empty seats are lost revenue since they cannot be inventoried and sold at a later time. To maximise revenue, airlines want to fill every seat in an airplane. The same is true for sporting events and concerts. Perishability can cause the reverse to occur. Demand can be greater than supply.

In this situation, the airliner does not have enough seats for everyone. Customers are left at the gate. In sporting events such as football’s Superbowl, baseball’s World Series, and hockey’s Stanley Cup, demand outstrips supply. Potential revenue is lost because of fixed seating capacities.

To reduce the negative impact of perishability, services must develop strategies to cope with fluctuating demand. This goal can be accomplished by making simultaneous adjustments in demand, supply, and capacity. The goal of these strategies is to achieve parity among the three. At the optimum, demand will equal supply, which in turn will equal capacity.

For a service such as Nu’uuli Place Cinema on Tutuila Island in American Samoa, demand often exceeds capacity during evening showings of popular new releases while during daytime showings the theatre usually has empty seats. To manage this situation, Nu’uuli Place Cinema must make simultaneous adjustments in demand, supply, and capacity.

One method of adjusting demand is to move some of the demand from the high-peak evening showings to nonpeak afternoons. Reducing the price for the afternoon showings is one way of doing this.

Supply can be adjusted by having multiple showings of the most popular movies during the evening. Nu’uuli Place Cinema could show the same movie at 7:30, 9:30, and midnight. To increase capacity, Nu’uuli Place Cinema could show a popular movie in two or three of the mini theatres at the same time.

6 Important Characteristics of Service Marketing Perishability, Changing Demand, Intangibility, Inseparability, Heterogeneity and Pricing of Services

The peculiar characterised services create challenges and opportunities to the service marketers.

Characteristics of services are given below:

1. Perishability:

As a marketing commodity, a service has a high degree of perishability. This element assumes unique importance. If a service is not used today, it is lost forever. It cannot be stored. It cannot be carried forward Unutilized services are economic losses.

A building unoccupied, a person unemployed, credit not utilised, a ship, a wagon or a ware house loaded to only half its capacity, empty rooms in a five star hotel are illustrations representing perishable nature of services and business which is lost forever.

2. Changing Demand:

The market for services has wide fluctuations. The fluctuations in demand may be seasonal or even by weak day or hours. During non-peak hours we need less transport. The use of public transport fluctuates greatly during the day. During night we need less telephone services. Tourism also has seasonal demand, cricket field are unused in the rainy season. Golf courses are not used in the winters.

3. Intangibility:

A physical product e.g. a television set, refrigerator, idli, dosa, face cream are visible and concrete products. You can see them, feel, taste them, smell them and even enjoy their possession. A service by nature is an abstract phenomenon. It is not a physical object. It has mature mental connotations.

While selling or promoting the sale of a service, we have to concentrate entirely on the benefits and satisfaction a buyer can derive after buying that service. We cannot emphasize the service itself. Banks promote the sale of credit card. Credit Card of the Central Bank of India is a new convenience card convenience taking on a new name. It is the first of its kind to be launched by a nationalised bank in India.

Whether you are out of business, shopping or just dinning out, you don’t have to pay cash or give a cheque. By holding a control card you can discover a new way of life. In this way a bank marketer can promote the sale of any bank services by stressing the benefits, conveniences and other advantages derived from that particular service.

The telephone company stresses how the use of telephone can reduce costs of selling and storage by using long large distance calls, of course sale of service, e.g., insurance involves, a real challenge. The burden of selling an intangible product like service falls mainly on the promotion mix.

4. Inseparability:

Personal service cannot be separated from the individual. Some services are created and supplied simultaneously. Dentist, musician, dancer and such other professions create and offer service at the same time. Hence due to inseparability, direct sale of many services in the only channel of distribution – the market for offering personal services is bound to be limited.

A person sells his service only to a limited number of customers in a day. However, when an institution is acting as a creator of a service, we may have its representatives or its agents to sell that service. For instances, a travel agent, an insurance broker, a finance broker, many represent and sell the services supplied by a tourist organisation, insurance company and financial institutions.

5. Heterogeneity:

The quality of services offered by the competing firms cannot be standardised. Even the quality of the output of services sold by one seller cannot be uniform or standardised. For instance, a technician cannot offer equal quality of service when he is repairing a number of television set.

Similarly, it is difficult to judge accurately the quality of services. Payment of price and the quality of actual performance may not too high or too low in relation to actual performance. This is particularly significant in the case of sports and entertainment of the services.

6. Pricing of Services:

Perishability fluctuations in demand and inseparability in services involve significant implication in pricing. Consumer may postpone purchases or perform same services themselves. Competition plays a secondary role in many services. Quality of services cannot be fully standardised.

There are many difficulties in pricing of services. In regulated services we have cost plus pricing usually prices of other services are determined on the basis of demand and competition. Variable pricing policy is also used in services. Discounts also offered in many services, e.g., insurance hotel etc.