Question

Disuss several ways in which physical goods are different from pure services. Give an example of a good and then an example of a service that illustrates each of the differences. Now that we are doing much of our shopping online how are pure services effected? How do we go about shopping for products and is it different than we shop for a pure service?

Answer 1

Answer:

The major differences between product and services are as follows,

1) Intangibility: Goods are tangible while Services are intangible: therefore, services can not be measured, weighed, inspected etc. a Service Level Agreement is usually needed.

2) Perishability: Goods can be stored until required whereas Services ‘perish’ immediately on delivery. Planning ahead is required so that the service is available when needed.

3) Heterogeneity: Goods are usually uniform in nature while services are unique at each delivery because the personnel and circumstances are different, making them difficult to standardize.

4) Ownership: Services have no transfer of ownership making it difficult to define when a service has been fulfilled and when risk and liability have passed from the seller to the buyer.

5) Inseparability: Services can not be separated from their supplier: goods can be delivered and stored before they are required, whereas, services are produced and consumed simultaneously.

Take a example of service related business

Products

Products are tangible and discernible items that the organization produces, including digital file-based output. Examples of products from the Digitization Services Branch:

• digital files sent to a network storage system (NAS/SAN)
• new prints of motion picture film elements
• prints for exhibit purposes
• reference copies on DVD/CDs for the Reading Rooms or other clients

Services

A service is the production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need. 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. Examples of services from the Digitization Services Branch:

• consulting with clients on appropriate products for specific purposes
• providing advice on risk assessment and priority setting
• working on standards committees
• conducting training and other educational outreach

Now a days it is trend of buying products online. The major setback of buying product online is that it has very limited and procedural after sales service. In product selling the prime entity is the product that is sold. Here service are considered second level and often overlooked Where as pure service business is one in which the service is the primary entity that is sold. If service is secured and guaranteed then required product automatically follows.