Question

How do services differ from goods? Identify five ways. Services are often knowledge-based. Provide two examples, and explain why they are knowledge-based.

Answer 1

Services differ with goods in following ways.

(i) They are intangible in nature, and unlike goods, they can not be examined before purchase. They are experienced when they are availed. For example, a massage can not be sampled before being experienced and there are many virtues which are intangible in nature ( such as the mannerism and skill of masseuse)

(ii) They are perishable in nature. They can not be stored like goods, and have to be availed at he scheduled time. For example, a train ticket for today is not valid tomorrow and once the train leaves, it is of no use.

(iii) The service has variability. Even when the same person or object is involved, there has to be a difference in service quality. For example the cab ride does not offer the same degree of comfort everytime.

(iv) The ownership of service is for a limited time. For example, your seat in cinema hall would be allotted to someone else in next show.

(v) Inseperability- The service and its provider can not be seperated. For example, a airline passenger must board an aircraft with all service crew / pilot providing the service.

There is always some kind of skill / knlwledge involved in provision of service. The ewo examples are

(i) Education service where a teacher needs to be competent to educate the students effectively.

(ii) A healthcare professional who needs to be qualified and knowledgeable to treat the patient appropriately.