A benefit you have to feel, and a meal that changes with the waiter

A service, the mid-term report says, is a run of activity that solves a customer’s problem through interaction. Unlike a product, it has no physical form. The benefit is something a person has to experience, and that makes it hard to judge before the fact. A firm is therefore advised to offer tangible clues, and to build a strong brand, so that trust can rise. Production and consumption happen together; the skill of the person who provides the service, and the part the customer takes, both weigh on quality. Inseparability is named as well: offering and use cannot be pulled apart, so the exchange itself matters, and good service to the customer, and marketing aimed inward at the staff, are treated as ways to lift what the staff can do.

Quality can also change with the provider and the occasion. The same meal in the same restaurant, the notes say, may feel different according to a waiter’s manner or a guest’s request. The advice that follows is double: standardise the offer and train the staff, and also differentiate through a service fitted to the person. And a service cannot be stored. If it is not used at the moment it is offered, the value goes. Demand and supply have to be kept in some kind of step, through a change of price, a booking system, and promotions.

Four familiar levers, and three more because the room and the people matter

The familiar marketing mix of product, price, place, and promotion is still here, and is described as centred on physical goods — on features, on a channel, on how a price is set, on advertising. For a service the notes add three more: people, process, and physical evidence. People means both the provider and the customer. Process is the procedure and the method. Physical evidence is the room and the setting in which the service is given. The extra three are needed, the report says, because interaction matters so much, and because quality leans on who provides the service and on the environment. Training and motivation of staff are how the people-lever is supposed to protect quality; a consistent, efficient process is how satisfaction is supposed to rise; the room can lift the experience and help a brand feel trustworthy. Those additions are also a way of managing intangibility, variability, inseparability, and perishability, and of raising satisfaction and loyalty.

A seat that cannot be sold tomorrow, and three ways to set a different price

Yield management, as defined here, is a strategic approach that tries to get the most revenue from limited resources, by balancing demand and supply and by moving the price as demand shifts with time and with different needs. It is used especially in airlines, hotels, and car rental. The first reason it matters for a service firm is perishability: an airline seat or a hotel room unsold at a given hour cannot be sold again. The second is intangibility, which makes a customer’s perception and experience central, so that price and capacity have to be handled with an eye to satisfaction. The third is that a strategy such as price discrimination can reach more than one group of customers and raise revenue.

Price discrimination, in this report, is the setting of different prices for the same service according to a segment of customers, and according to willingness to pay, the moment of purchase, and the conditions of use. Three kinds are named. Time-based discrimination changes the price by hour or by season; airlines and hotels, the notes say, price a peak period differently from an off-peak one, and a weekday differently from a weekend. Customer-based discrimination changes the price by the characteristics of the buyer. Product-based discrimination changes it by the conditions or the level of what is offered; economy class and business class on an airline are the example given.

The writer also names Naver as a service firm thought to manage revenue well, and turns to Google’s positioning: centred on artificial intelligence, polished, advanced, and built around the user, with a claim to technical leadership, and with search, speech recognition, image analysis, and tailored advertising among the services named. Gmail’s efficient functions and, as the writer puts it, unlimited storage on Google Photos are offered as cases of convenience. That storage example is left as the writer stated it, not updated as a later official fact. An online course that a customer later finds of little use is mentioned as the sort of doubt an intangible offer can leave behind. The same Korean report, at fuller length, is on CampusDown.

Sources

1. A mid-term report from the 2024 academic year on the traits of a service, the 7Ps, yield management, and price discrimination.
2. The four traits as the notes set them out — intangibility, simultaneity of production and consumption, variability, perishability — with inseparability named as well, and a restaurant meal as the example of a quality that can shift.
3. Yield management as used in airlines, hotels, and car rental; three kinds of price discrimination (time, customer, and product), with economy and business class among the examples.
4. Naver, as the writer’s example of revenue management, and Google’s positioning around AI and convenience, including Gmail and Google Photos as the writer describes them.

Last updated: 14 November 2026