How do we define and classify services, and how do they differ from goods

Chapter 12:Designing and managing

How do we define and classify services, and how do they differ from goods?

By:Kartik SinglaIndian Institute of Technology(BHU), Varanasi

A service is any act of performance one party can

offer to another

that is intangible and does not result in the ownership of

anything.

Government sector services (Police)

Private Nonprofit sector services (colleges)

Business sector services (companies)

Manufacturing sector services (accountants)

Services can be classified on the basis of:

1.

Equipment based

People based

Manual or automatic

2. Different processes of delivery

Different type of restaurant services

Presence or absence of

client3.

Needs4.

Personal need

Business need

Objectives5.

Profit

Non profit

Ownership6.

Private

Public

Differences between products and services

Physical products can be touched,

ButServices are

Intangible i.e. they cannot be seen, tasted or felt before they are bought.”

Physical products are manufactured and consumed later,

ButServices are

Inseparable i.e. they are produced and consumed simultaneously.

Physical products

are of the same type

if they belong to the

same category,

ButServices have high

Variability i.e. their quality depends highly on the provider.

Physical products can be stored,

ButServices are

Perishable i.e. they need to be provided at the right place and time to right people.

“These slides were prepared by ‘Kartik Singla’

as a part of an internship done under ‘Prof. Sameer Mathur’ (www.IIMInternship.com).”

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