Question

What are the basic characteristics that distinguish services v/s goods?

Answer 1

There are five essential differences between services and goods. The first is that a service is an intangible process that cannot be weighed or measured, whereas a good is a tangible output of a process that has physical dimensions. This distinction has important business implications since a service innovation, unlike a product innovation, cannot be patented. Thus, a company with a new concept must expand rapidly before competitors copy its procedures. Service intangibility also presents a problem for customers since, unlike with a physical product, they cannot try it out and test it before purchase.

The second is that a service requires some degree of interaction with the customer for it to be a service. The interaction may be brief, but it must exist for the service to be complete. Where face-to-face service is required, the service facility must be designed to handle the customer's presence. Goods, on the other hand, are generally produced in a facility separate from the customer. They can be made according to a production schedule that is efficient for the company.

The third is that services, with the big exception of hard technologies such as ATMs and information technologies such as answering machines and automated Internet exchanges, are inherently heterogeneous—they vary from day to day and even hour by hour as a function of the attitudes of the customer and the servers. Thus, even highly scripted work such as found in call centers can produce unpredictable outcomes. Goods, in contrast, can be produced to meet very tight specifications day-in and day-out with essentially zero variability. In those cases where a defective good is produced, it can be reworked or scrapped.

The fourth is that services as a process are perishable and time dependent, and unlike goods, they can't be stored. You cannot “come back last week” for an air flight or a day on campus.

And fifth, the specifications of a service are defined and evaluated as a package of features that affect the 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 the service; 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

Answer 2

Answer :

Cambridge English Dictionary defines 'goods' as ' things for sale, or the things that you own.'

Cambridge English Dictionary defines 'services' as 'the act of dealing with customers in a shop, restaurant, or hotel by taking their orders, showing or selling them goods, etc..'

The following basic characteristics distinguish services and goods :

1. When buying a service, the ownership is not transferred to the end user while purchasing a good transfers the ownership to the customer.

2. Goods are tangible while services are intangible.

3. Involvement of customers is more in the case of services.

4. Goods have uniform quality while services have varying quality.

5. Evaluation of goods is easy but the evaluation of services is very difficult.

6. There are no inventories in case of services.

7. Goods can be easily returned while the same does not apply to services.

8. Goods can be stored for along time while services need to be immediately consumed.

9. There is a huge gap between production and consumption in case of goods. Services, on the other hand, are simultaneously produced and consumed.