BUSINESS SERVICES
SERVICE - Meaning
Services are essentially intangible activities which are separately identifiable and provide
satisfaction of wants. We cannot kept it in stock. Their purchase does not result in the ownership
of anything physical. Services involve an interaction to be realized between the service provider
and the consumer.
GOODS - Meaning
A good is a physical product capable of being delivered to a purchaser and involves the transfer
of ownership from seller to customer. Goods also refer to commodities or items of all types,
except services, involved in trade or commerce.
Nature of services
There are five distinct characteristics of services as discussed below
(i) Intangibility - Services are intangible, i.e., they cannot be touched. They can only be
experienced and hence the quality of the service cannot be determined before consumption
Therefore, the service providers consciously work on creating a desired service so that the
customer has a favorable experience. e.g., service in a restaurant should be a favorable
experience for customer to visit again.
(ii) Inconsistency - Services have to be performed exclusively each time according to different
consumer demands as there is no standard tangible product on offer. Hence inconsistency is an
important characteristic of services. Service providers need to modify their offer to closely meet
the requirements of the customers. e.g., services provided by nationalized banks are quite
different from the banking services provided by private banks.
(iii) Inseparability - Activities of production and consumption are performed simultaneously in
case of services which makes the production and consumption of services seem to be inseparable
as services have to be consumed as and when they are produced. e.g., we cannot separate the
medical services provided by a doctor.
(iv) Absence of Inventory - Services are intangible and perishable and hence cannot be stored
for future use. This implies that the supply needs to be managed according to demand as the
service has to be performed as and when the customer asks for it. e.g., a medicine can be stored
but the medical care will be experienced only when the doctor provides it.
, v) Involvement - Participation of the customer in the service delivery process is an Important
characteristic of services as the customer has the opportunity to get the services modified
according to his/her specific requirements e g., cinema halls are providing services to watch
movie but the customer has to visit to the hall to experience the
movie in cinema hall.
Difference between services and goods
SERVICE - Meaning
Services are essentially intangible activities which are separately identifiable and provide
satisfaction of wants. We cannot kept it in stock. Their purchase does not result in the ownership
of anything physical. Services involve an interaction to be realized between the service provider
and the consumer.
GOODS - Meaning
A good is a physical product capable of being delivered to a purchaser and involves the transfer
of ownership from seller to customer. Goods also refer to commodities or items of all types,
except services, involved in trade or commerce.
Nature of services
There are five distinct characteristics of services as discussed below
(i) Intangibility - Services are intangible, i.e., they cannot be touched. They can only be
experienced and hence the quality of the service cannot be determined before consumption
Therefore, the service providers consciously work on creating a desired service so that the
customer has a favorable experience. e.g., service in a restaurant should be a favorable
experience for customer to visit again.
(ii) Inconsistency - Services have to be performed exclusively each time according to different
consumer demands as there is no standard tangible product on offer. Hence inconsistency is an
important characteristic of services. Service providers need to modify their offer to closely meet
the requirements of the customers. e.g., services provided by nationalized banks are quite
different from the banking services provided by private banks.
(iii) Inseparability - Activities of production and consumption are performed simultaneously in
case of services which makes the production and consumption of services seem to be inseparable
as services have to be consumed as and when they are produced. e.g., we cannot separate the
medical services provided by a doctor.
(iv) Absence of Inventory - Services are intangible and perishable and hence cannot be stored
for future use. This implies that the supply needs to be managed according to demand as the
service has to be performed as and when the customer asks for it. e.g., a medicine can be stored
but the medical care will be experienced only when the doctor provides it.
, v) Involvement - Participation of the customer in the service delivery process is an Important
characteristic of services as the customer has the opportunity to get the services modified
according to his/her specific requirements e g., cinema halls are providing services to watch
movie but the customer has to visit to the hall to experience the
movie in cinema hall.
Difference between services and goods
