difference between goods and services class 11
Answers
4 dfferences between goods and services
1) Ownership is not transferred
When buying a service, the service ownership is not transferred to the end customer. If you buy a car then the car is yours. But if you buy a ticket for an airline, then the airline is definitely not yours.
2) Intangibility
How do you measure service? In a restaurant, the dish can be measured, but the efforts gone in making the same dish by two different chefs cannot be measured from the customer end. Same goes for large service corporates like Accenture and Infosys. The time and effort gone for giving service to the customer is intangible. Both ownership and intangibility are old school differences between goods and services.
3) Involvement of customer
When comparing the difference between goods and services we have to look at the involvement of customer as well. In services involvement of customers is much more than in products. For example – ATM’s are services wherein customer has to use the machine. The same goes for vending machines as well as for self service restaurants. Today ice cream chains like Hokey pokey and food chain like Subway have more than 50% involvement of customer where the customer gets to decide the ingredients they want in their ice cream / Subway sandwich.
4) Quality
In case of products, mass manufacturing is common. And mass manufacturing means uniformity. However, services involve a lot of manual labour due to which the quality may vary each time. Uniformity in services is a factor which each service owner tries for. For example – The major challenge of food chains like Subway, Pizza hut and dominos is to give the same quality over and over again, whereas in local restaurants the quality of food may vary time to time from the same restaurant.