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In what aspects are service products different from goods?

In what aspects are service products different from goods?


1 Answer

A product is something that a producer makes and offers to consumers to provide satisfaction of the needs. Service products are different from goods in five major characteristics i.e.

  1. Intangibility,
  2. Inseparability,
  3. Heterogeneity,
  4. Perish-ability, and
  5. Ownership

Intangibility Goods: are tangible in the sense that they have physical dimensions and attributes and can be seen, felt or tasted, services are intangibles. The characteristics of intangibility lies on a continuum with pure goods at one end and pure services at the other with most products lying away from the two extremes. Similarly, services can be distinguished between “pure intangible” services which add value to a tangible product and services that make available tangible product.


Inseparability: A physical item is produced in a factory, bought in a shop and consumed in the customer’s premises at his conveniences. But when one buys a service like a courier or a doctor, the production and consumption tithe service takes place at the same time. The service product being an intangible, as experienced by the customers, exists only during the experience and that is when it is produced as well as consumed or used. Hence, the production and consumption cannot be separated.

Heterogeneity: Because of the factor of inseparability it is not possible to produce a service in advance according to specified standards. Both production and consumption being by humans, the product of services as experienced, may not be of consistent quality. What is “excellent” to one, may not be so to another. This explains the heterogeneity of services.

Ownership: No ownership passes from seller to buyer in a service. The buyer only acquires the right to certain benefits of what the seller offers. One may have the right to use a hotel room or a railway berth for a period of time, but the ownership of the room or berth remains with the hotels or the railways. However, in the case of goods the ownership passes on to the buyer.

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August 29, 2018