Answer to Question 1
B
Answer to Question 2
1. Intangibility
It is difficult for customers to evaluate quality, especially before purchase and consumption.
It is difficult to convey service characteristics and benefits in promotion. As a result, the firm is forced to sell a promise.
Many services have few standardized units of measurement. Therefore, service prices are difficult to set and justify.
Customers cannot take possession of a service.
2. Simultaneous Production and Consumption
Customers or their possessions must be present during service delivery.
Other customers can affect service outcomes including service quality and customer satisfaction.
Service employees are critical because they must interact with customers to deliver service.
Converting high-contact services to low-contact services will lower costs but may reduce service quality.
Services are often difficult to distribute.
3. Perishability
Services cannot be inventoried for later use. Therefore, unused service capacity is lost forever.
Service demand is very time-and-place sensitive. As a result, it is difficult to balance supply and demand, especially during periods of peak demand.
Service facilities and equipment sit idle during periods of off-peak demand.
4. Heterogeneity
Service quality varies across people, time, and place, making it very difficult to deliver good service consistently.
There are limited opportunities to standardize service delivery.
Many services are customizable by nature. However, customization can dramatically increase the costs of providing the service.
5. Client-based Relationships
Most services live or die by maintaining a satisfied clientele over the long term.
Generating repeat business is crucial for the service firm's success.
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