NATURE OF SERVICES

There are five basic features of services.These features also distinguish them from goods and are known as the five Is of services. These are discussed as below:

(i) Intangibility: Services are intangible, i.e., they cannot be touched. They are experiential in nature. One cannot taste a doctor’s treatment, or touch entertainment. One can only experience it. An important implication of this is that quality of the offer can often not be determined before consumption and, therefore, purchase. It is, therefore, important for the service providers that they consciously work

on creating a desired service so that the customer undergoes a favourable experience. For example, treatment by a doctor should be a favourable experience. (ii) Inconsistency: The second important characteristic of services is inconsistency. Since there is no standard tangible product, services have to be performed exclusively each time. Different customers have different demands and expectations. Service providers need to have an opportunity to alter their offer to closely meet the requirements of the customers. This is happening, for example, in the case of mobile services. (iii) Inseparability: Another important characteristic of services is the simultaneous activity of production and consumption being performed. This makes the production and consumption of services seem to be inseparable. While we can manufacture a car today and sell it after, say, a month; this is often not possible with services that have to be consumed as and when they are produced. Service providers may design a substitute for the son by using appropriate technology but the interaction with the customer remains a key feature of services. Automated Teller Machines (ATMs) may replace the banking clerk for the front office  ctivities like cash withdrawal and cheque deposit. But, at the same time, the presence of the  customer,  s required and his/her interaction with the process has to be managed. (iv) Inventory (Less): Services  ave little or no tangible components and, therefore, cannot be stored for a future use. That is, services  re perishable and providers can, at best, store some associated goods but not the service itself. This  ans that the demand and supply needs to be managed as the service has to be performed as and when the customer asks for it. They cannot be performed earlier to be consumed at a later date. For example, a railway ticket can be stored but the railway journey will be experienced only when the railways  rovides it. 

Difference between Services and Goods

Banking and Social Objectives

In the recent past there has been a concerted effort by the policy makers in

reorienting banking towards achieving social objectives. There has been a major

shift in the banking policy of the country:

from to

(i) Urban orientation — Rural orientation

(ii) Class banking — Mass banking

(iii) Traditional — Innovative practices

(iv) Short term objectives — Development objectives