service

A type of economic activity that is intangible, is not stored and does not result in ownership. A service is
consumed at the point of sale. Services are one of the two key components of economics, the other being
goods. Examples of services include the transfer of goods, such as the postal service delivering mail, and the
use of expertise or experience, such as a person visiting a doctor.

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Intangible products that are not goods (tangible products), such as accounting, banking, cleaning, consultancy, education,
insurance, know how, medical treatment, transportation. Sometimes services are difficult to identify because they are
closely associated with a good; such as the combination of a diagnosis with the administration of a medicine. No transfer of
possession or ownership takes place when services are sold, and they (1) cannot be stored or transported, (2) are
instantly perishable, and (3) come into existence at the time they are bought and consumed. See also service

final good (service)

That which is consumed by the end user and does not require any further processing. Contrast with
intermediate good

Characteristics of services
The services have unique characteristics which make them different from that of goods. The
most common characteristics of services are:
Intangibility.
Inseparability.
Perish ability.
Variability

Intangibility
Services are activities performed by the provider, unlike physical products they cannot be seen,
tasted, felt, heard or smelt before they are consumed. Since, services are not tangibles, they do
not have features that appeal to the customer’s senses, their evaluation, unlike goods, is not
possible before actual purchase and consumption. The marketer of service cannot rely on
product-based clues that the buyer generally employs in alternative evaluation prior to purchase.
So, as a result of this, the services are not known to the customer before they take them. The
service provider has to follow certain things to improve the confidence of the client:
The provider can try to increase the tangibility of services. For example, by displaying a plastic
or a clay model showing patients an expected state after a plastic surgery.
The provider can emphasize on the benefits of the service rather than just describing the features.
Not all the service product has similar intangibility. Some services are highly intangible, while
the others are low i.e. the goods (or the tangible component) in the service product may vary
from low to high.
For example: Teaching, Consulting, Legal advices are services which have almost nil tangible
components; While restaurants, fast food centers, hotels and hospitals offer services in which
their services are combined with product (tangible objective) , such as food in restaurants, or
medicines in hospitals etc.

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Services are said to be intangible - they cannot be seen or tasted, for example. This can cause lack
of confidence on the part of the consumer As was apparent earlier, in considering pricing and
services marketing, it is often difficult for the consumer to measure service value and quality. To
overcome this, consumers tend to look for evidence of quality and other attributes, for example in the
decor and surroundings of the beauty salon, or from the qualifications and professional standing of
the consultant.
Inseparability
Services are typically produced and consumed simultaneously. Incase of physical goods, they are
manufactured into products, distributed through multiple resellers, and consumed later. But,
incase of services, it cannot be separated from the service provider. Thus, the service provider
would become a part of a service.
For example: Taxi operator drives taxi, and the passenger uses it. The presence of taxi driver is
essential to provide the service. The services cannot be produced now for consumption at a later
stage / time. This produces a new dimension to service marketing. The physical presence of
customer is essential in services. For example: to use the services of an airline, hotel, doctor, etc
a customer must be physically present.
Inseparability of production and consumption increases the importance of the quality in services.
Therefore, service marketers not only need to develop task-related, technical competence of
service personnel , but also , require a great input of skilled personnel to improve their marketing
and inter personal skills.

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Services are produced and consumed at the same time, unlike goods which may be manufactured,
then stored for later distribution. This means that the service provider becomes an integral part of the
service itself. The waitress in the restaurant, or the cashier in the bank, is an inseparable part of the
service offering. The client also participates to some extent in the service, and can affect the
outcome of the service. People can be part of the service itself, and this can be an advantage for
services marketers
Perish ability
Services are deeds, performance or act whose consumption take place simultaneously; they tend
to perish me the absence of consumption. Hence, services cannot be stored. The services go
waste if they are not consumed simultaneously i.e. value of service exists at the point when it is
required.
The perishable character of services adds to the service marketer’s problems. The inability of
service sector to regulate supply with the changes in demand; poses many quality management
problems. Hence, service quality level deteriorates during peak hours in restaurants, banks,
transportation etc. This is a challenge for a service marketer. Therefore, a marketer should
effectively utilize the capacity without deteriorating the quality to meet the demand.

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Services are perishable; they cannot be stored. Therefore an empty seat on a plane, for example, is
a lost opportunity forever. Restaurants are now charging for reservations which are not kept,
charges may be made for missed appointments at the dental clinic. Perishability does not pose too
much of a problem when demand for a service is steady, but in times of unusually high or low
demand service organisations can have severe difficulties.
The above characteristics are generally referred to in many texts as being what makes services
marketing so different. However, this assumption should be queried on a number of grounds. Like all
sweeping generalizations, generalizations concerning services marketing do not always represent
the full picture. Consider the question of tangibility. In the main, services can be broken down into
three main classifications:
Rented goods services
Consumer-owned goods services
Non-goods services
Some of these categories involve goods which are physical, and which contribute in some way to the
service offering. This gives rise to questions about the degree to which services can be classed as
intangible.
Another way of classifying services is to consider the distinction between equipment-
based
services and people-based services. Examples of equipment-based services would
include:
Vending machines Car and tool hire Airlines
People-based services would include:
Nursery infant care
Architects Legal services
Yet another distinction can be made between consumed services, which are offered on a personal
basis, and business-to-business or industrial services. Some service providers may operate in both
these market sectors:
Franchised child care services may offer local services to parents, and operate in-company
schemes. Hotels may cater for the tourist and the business or conference market. Private health
care programmes generally offer personal and corporate rates. On the other hand, some services
such as industry-specific consultancy services or marine salvage operate in quite closely defined
market sectors

Variability
Services are highly variable, as they depend on the service provider, and where and when they
are provided. Service marketers face a problem in standardizing their service, as it varies with
experienced hand, customer, time and firm. Service buyers are aware of this variability. So, the
service firms should make an effort to deliver high and consistent quality in their service; and
this is attained by selecting good and qualified personnel for rendering the service.
Difference Between Goods and Services

There are obvious differences between goods and services that are analyzed based on
characteristics of each. A good is a tangible object used either once or repeatedly. A service is
intangible. The tangibility differentiator indicates the ability to touch, smell, taste and see which
is absent in services. This can be a deterrent to the service receiver to gauge the quality and
dependant on the service company reputation. In the case of goods the ownership of the product
is transferable from sellers to buyers, whereas in services there is no ownership involved.
On the quality front, with goods it is homogeneous, once produced the quality is uniform across
all line of products. They can be separated from the seller/ provider and not dependant on the
source for its delivery to the purchaser. With regard to service it is inseparable from the service
provider and heterogeneous, where each time the service is offered it may vary in quality, output,
and delivery. It cannot be controlled and is dependant on the human effort in achieving that
quality hence is variable from producer, customer and daily basis.
Another key distinction is perishability of services and the non perishability of goods. Goods will
have a long storage life and are mostly non perishable. Whereas services are delivered at that
moment and do not have a long life or cannot be stored for repeat use. They do not bear the
advantage of shelf life as in the case of goods like empty seats in airlines. With the production
and consumption taking place simultaneously in services, it differs from goods on simultaneity
and the provisions for quality control in the process.
Both goods and services need not be driven by economic motives. Several times goods and
services are linked closely and cannot be detached. For example on purchase of a car, the good is
the car but the processing, the provision of accessories, after sales activities are all services. It is
essential to note that the difference between pure goods and pure services are in contrast but
most goods and services exist in between with a mix of both. For instance, in a restaurant, food
refers to goods while the service is the waiters offering, the ambience, the setting of tables
amongst others.
Summary:
1. Goods are tangible, and transferable while the services are intangible and non transferable.
2. Goods are separable, and non – perishable while services are inseparable.
3. Goods are homogeneous while services are heterogeneous.