What are services? Explain their distinct characteristics?
What are services? Explain their distinct characteristics?
Services are intangible economic activities that require personal interaction between the consumer and the service provider at the time of delivery of the services. Services need not involve any kind of production or sale of goods and are mainly provided in order to satisfy individuals’ wants. Services are generally classified into business services (including banking, insurance and warehousing) and professional services (including legal services, medical advice and tax consultancy).
Features of services are as follows:
(i) Intangible: Services are intangible as they cannot be seen or touched. One can only experience them. This implies that the quality of services cannot be checked before their use. Thus, it becomes imperative for service providers to offer services to the satisfaction of the individuals concerned.
(ii) Inseparable: Services have to be produced and used simultaneously. Unlike goods, which are produced today for sale later, services have to be used at the same time as they are made available.
(iii) Inconsistent: No standards can be set for services; they have to be provided each time according to the demand and expectations of the service users. As each service user has different tastes and preferences, the type and quality of services provided differ according to the user.
(iv) Involvement: The involvement of the service user and the service provider is a prerequisite at the time of delivery of the services. For instance, in a school, the teacher and the students are actively involved in the exchange of the service of imparting knowledge.
(v) Inventory: Services cannot be stored for sale at a future date. They need to be provided as and when the service users ask for them. This is because if services are not consumed immediately then they lose its value.
Services are intangible economic activities that require personal interaction between the consumer and the service provider at the time of delivery of the services. Services need not involve any kind of production or sale of goods and are mainly provided in order to satisfy individuals’ wants. Services are generally classified into business services (including banking, insurance and warehousing) and professional services (including legal services, medical advice and tax consultancy).
Features of services are as follows:
(i) Intangible: Services are intangible as they cannot be seen or touched. One can only experience them. This implies that the quality of services cannot be checked before their use. Thus, it becomes imperative for service providers to offer services to the satisfaction of the individuals concerned.
(ii) Inseparable: Services have to be produced and used simultaneously. Unlike goods, which are produced today for sale later, services have to be used at the same time as they are made available.
(iii) Inconsistent: No standards can be set for services; they have to be provided each time according to the demand and expectations of the service users. As each service user has different tastes and preferences, the type and quality of services provided differ according to the user.
(iv) Involvement: The involvement of the service user and the service provider is a prerequisite at the time of delivery of the services. For instance, in a school, the teacher and the students are actively involved in the exchange of the service of imparting knowledge.
(v) Inventory: Services cannot be stored for sale at a future date. They need to be provided as and when the service users ask for them. This is because if services are not consumed immediately then they lose its value.
