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Home » Service marketing » Difference between goods and services

Difference between goods and services

May 4, 2018 By Hitesh Bhasin Tagged With: Service marketing

There is a major difference between goods and services based on both tangible as well as intangible factors. Goods are basically objects or products which have to be manufactured, stored, transported, marketed and sold. Lays chips, BMW, Adidas are some companies manufacturing goods.

Services on the other hand are output of individuals and they can be a collective or individualistic action or performance by an individual. For example a barber or a chartered accountant are giving individual services. Airlines on the other hand have airplanes which is a product but travelling by airplanes is a service (airlines are one of the most competitive service sectors today).

Difference between goods and services

Thus the difference between goods and services is based on tangibility. Where goods are tangible in nature, services are mostly intangible. The classic rules which defined services were intangibility, heterogeneity, perishability and variability. However, although the old rules are applicable even today, several new rules have been added to define the difference between goods and services.

Difference between goods and services

Table of Contents

  • 7 differences between goods and services
  • 1) Ownership is not transferred
  • 2) Intangibility
  • 3) Involvement of customer
  • 4) Quality
  • 5) Evaluation of services is tougher
  • 6) Inventories are absent
  • 7) Time is very important in services

7 differences 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.

5) Evaluation of services is tougher

As quality varies from time to time and the involvement of customer is maximum, evaluation of different services becomes tougher. For example – HDFC has more number of ATM than SBI. Thus we can evaluate that HDFC service is better because they have more reach to the end customer. But how do we evaluate how a barber cuts your hair.

6) Inventories are absent

Production and consumption of services happens at the same time. This does not mean that the raw material is not present to provide the service. For example in a restaurant, a dish is made only after you order it. The raw material and the chef might be present. But the production does not begin unless and until there is a customer to consume the service.

7) Time is very important in services

Because inventories are absent in services, and because production and consumption is at the same time, time is a very important difference between goods and services. The keyword here is “delay”. There should be no delay in providing the service. Thus the cab should arrive on time, the food should be prepared by time and the trains should run on time. Because time is important.

Thus the difference between goods and services is based on many different factors. These factors have become more and more acute as the services sector rises in demand.

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Related posts:

  1. What is Service Strategy? Meaning, Importance and Process
  2. 6 Core Reasons that Customer Service is Important
  3. 4 Main Types Of Marketing Services You can Receive from Marketing Agencies
  4. What is Service Excellence? And Why it is Important
  5. Intangibility of services
  6. Seven characteristics of services
  7. Service triangle or The service marketing triangle
  8. Service Differentiation and 7 Ways to Differentiate Service from Competitor
  9. Flowcharting in services – Service flow chart
  10. Service Channels in Marketing and their role in services
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About Hitesh Bhasin

I love writing about the latest in marketing & advertising. I am a serial entrepreneur & I created Marketing91 because I wanted my readers to stay ahead in this hectic business world.

Comments

  1. venkatanarayana says

    super explanation.

    Reply
    • amiesh kumae says

      really it is super

      Reply
    • zylstra says

      Is web hosting, or a domain name, a product or a service?

      Reply
      • Hitesh Bhasin says

        Web hosting is a service. Domains are services for us users. But for godaddy or domain registrars, it is their product.

  2. Abhishek says

    Explained in details with good example

    Reply
  3. rachel t says

    legible and super understandable!

    Reply
  4. Amon says

    a good evaluation of a good & a service. I like it.

    Reply
  5. Amon says

    a decent evaluation of a good & a service. I like it.

    Reply
  6. AMWESIGA JAMES says

    THANKS FOR SHARING YO WISEDOM

    Reply
  7. Sonia George says

    So understandable thanks for clearification

    Reply
  8. Ibrahimu Rajabu says

    thats is good point can you share with me other link for marketing point so that i can publish in my defferent blogs to advertising you and to do the same to me…. please send to my e-mail

    Reply
  9. Rabiya says

    simply Product is noun while service is verb

    Reply
  10. benjamin ndaluka says

    yeah am real atttracted to reading more of your comments and posts real are found helpful to me and my colies here at school about the differences between services and goods which all are products

    Reply
  11. Lloyd Ngoma says

    Exceptional Explanation

    Reply
  12. Supradip says

    Good explained,, ,,,,,, i like that

    Reply
  13. Tarikul Islam says

    I like it…

    Reply
  14. DAMULAQ KENNTH says

    VERY NICE

    Reply
  15. sakthi says

    Thanks for your explanation. It made things very clear.

    Reply
  16. ishfq kashmiri says

    most understandable defenations…

    Reply
  17. Abdul Jabbar says

    excellent explanation

    Reply
  18. Saeera says

    Nice..

    Reply
  19. Fred marvin says

    perfect explanation

    Reply
  20. Denis says

    Thanks for the explanations and the points as well. They have been helpful to me alot.

    Reply
  21. Ramswetha says

    Super explanation and then very helpful.

    Reply

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