What is Business Services?

Business services are referred to as the activities that assist business yet does not deliver a tangible commodity. For instance, Information technology is one such business service that supports various other business services such as shipping, procurement, and finance. Most of the businesses today are inclined towards such specialized business services.

India is growing extremely competitive and giving a tough competition to other countries when it comes to providing services. A large number of foreign country prefer India as their hosting partner for business services, sometimes they even prefer to open a branch office.

Characteristics of Business Services

Business services divided into five characteristics are mentioned below.

  • Intangibility- Services that cannot be touched but can only experience are known as intangible.
  • Inconsistency- It is the second significant characteristic of services. Since the services are not tangible, each individual has their own specific taste, expectation, and demand. So, the service providers should have the ability to change the service according to the need of the customers.
  • Inseparability- This refers to the simultaneous production of goods and services while the consumption is being performed.
  • Inventory- Since the business services have no tangible components it cannot be stored for future use. Service providers can only save relative goods but not the entire service.

This indicates that the service provider has to maintain the supply and demand of the service and present it whenever the customer demands it.

  • Involvement- This means that a customer can get the services altered according to their requirements and desire.

Q.1 WHAT ARE BUSINESS SERVICES AND EXPLAIN THEIR NATURE?

OR

WHAT ARE SERVICES? EXPLAIN THEIR DISTINCT CHARACTERISTICS? (NCERT)

ANSWER:

(A) BUSINESS SERVICES

  • Work that supports the business.
  • That does not produce a tangible commodity.
  • Example

    Information technology is the important business services which support many other business services like procurement, shipping etc.

(B) FOLLOWING ARE THE CHARACTERISTICS OF BUSINESS SERVICES:

(1) INTANGIBILITY

  • These are intangible assets, they cannot be touched.
  • They don’t have their physical presence.
  • A person can only experience it.
  • It is important to provide quality service to the customer, so that customer can feel the favourable experience.
  • Example

    Teaching by teachers, doctor’s treatment to patients etc.

(2) INCONSISTENCY

  • There is no consistency in the services as like in physical products.
  • Each time the service has to be performed exclusively.
  • Demands and expectations of the different customers are different.
  • Every time the service provider has to modify the service accordingly.

(3) INSEPARABILITY

  • Production and consumption are simultaneous in case of services.
  • If we produce the goods today, it can be sold later.

(4) INVENTORY

  • Services cannot be stored for the future.
  • It has no physical component.
  • Demand and supply for the service are very close to each other.
  • Service has to be provided to the customer as and when it is asked by them.
  • Example:

    Mc Donald’s burger can be stored but the taste can only be experienced.

    Airways ticket can be stored, the journey can be experienced.

(5) INVOLVEMENT

  • Services are provided according to the requirement of customers.
  • It has the involvement of customers in the service providing process.

Q.2 WHAT ARE THE TYPES OF SERVICES?

ANSWER:

FOLLOWING ARE THE TYPES OF SERVICES:

(1) BUSINESS SERVICES

  • Services used by the business enterprises in conducting the activities of the business.
  • Example:

    Banking, insurance, warehousing, communication services etc.

(2) SOCIAL SERVICES

  • These are provided voluntarily to fulfil the social goals.
  • Example:

    Providing education and health facilities to the employees and their family members.

(3) PERSONAL SERVICES

  • These are not consistent in nature.
  • Different consumers have different services.
  • They depend upon the customer’s priority.
  • Example:

    Tourism, restaurant etc.

Q.3 STATES THE DIFFERENCES BETWEEN GOODS AND SERVICES?

OR

DEFINE SERVICES AND GOODS? (NCERT)

ANSWER:

BASIS

GOODS

SERVICES

(1) EXISTENCE

Physical existence

No physical existence

(2) INSEPARABILITY

Production and consumption can be separated.

E.g. Purchasing vegetables to store.

Production and consumption cannot be separated.

E.g. Having food in the restaurant.

(3) INCONSISTENCY

Different customers getting standardized demand fulfilled.

Different customers having different demands.

(4) TYPE

Homogeneous

Heterogeneous

(5) INVENTORY

Can be kept in stock

Cannot be kept in stock

Q.4 WHAT IS AN INTANGIBLE PRODUCT?

ANSWER:

  • These are intangible assets, they cannot be touched.
  • They don’t have their physical presence.
  • A person can only experience it.

    Example :

    Teaching by teachers, the doctor with patients etc.

Q.5 GIVE 3 EXAMPLES OF SERVICES?

ANSWER:

Banking, insurance, transportation.

Q.6 NAME THE SERVICES WHICH ARE UNDERTAKEN BY ORGANISATION TO ENCOURAGE SOCIAL WELFARE?

ANSWER:

Social services.

Q.7 NAME THE SERVICES WHICH ARE UNDERTAKEN BY ORGANISATION TO FULFILL THE OBJECTIVES OF THE ORGANISATION?

ANSWER:

Business activities.

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