The difference between Goods and Services
In economics, a service is an intangible commodity. That is, services are an example of intangible economic goods.
Service provision is often an economic activity where the buyer does not generally, except by exclusive contract, obtain exclusive ownership of the thing purchased. The benefits of such a service, if priced, are held to be self-evident in the buyer's willingness to pay for it. Public services are those, that society (nation state, fiscal union, regional) as a whole pays for, through taxes and other means.
By composing and orchestrating the appropriate level of resources, skill, ingenuity, and experience for effecting specific benefits for service consumers, service providers participate in an economy without the restrictions of carrying inventory (stock) or the need to concern themselves with bulky raw materials. On the other hand, their investment in expertise does require consistent service marketing and upgrading in the face of competition.
Services can be paraphrased in terms of their key characteristics, sometimes called the "FourI's of Services".
Intangibility:A service is intangible process that cannot be weighed or measured, whereas a good is a tangible output of a process that has physical dimensions.
Inseparability:A service requires some degree of interaction with the customer for it to be serviced. Goods, on the other hand, are generally produced in a facility separate from the customer.
Inconsistency:Services are inherently heterogeneous – they vary from day to day and even hour by hour as a function of the attitudes of the customer and servers. Goods, in contrast, can be produced to meet very tight specifications day-in and day-out with essentially zero variability.
Inventory:Services are perishable and time dependent.
The specifications of a service are defined and evaluated as a package of features that affect five senses. These features are:
Supporting facility (location, decoration, layout, architectural appropriateness, supporting equipment).
Facilitating goods (variety, consistency, quantity of the physical goods that go with services; for example, the food items that accompany a meal service).
Explicit services (training of service personnel, consistency of service performance, availability and access to the service, and comprehensiveness of the service).
Implicit services (attitude of the servers, atmosphere, waiting time, status, privacy and security, and convenience).
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