Question

What is the difference between a good and a service? Why is it important to understand that difference?

Answer 1

A good is defined as an entity which is tangible, means which can be touched, seen & measured. For exa, rice,wheat, vegetables, chair, table etc. It has physical characteristics.

Whereas, a service is an intangible item which can't be touched,seen and measured. Services are the intangible item that is provided by a person on the demand of other person. It has no physical identity.For exa, services of doctor towards its patient, services of a carpenter,lawer, teacher etc.

The following are the differences between good and service.

1) Ownership : When buying a good, ownership is transferred to the end customer. For exa, if you buy a car or a fridge, the ownership is transferred to your name. But when you buy a ticket for train then the train is not yours.

2) Tangibility: A product is tangible, it can be measured and touched. But a service can't be tangible. For exa, in a hospital the services of a doctor can't be measured whereas rice or wheat can be measured.

3) Involvement of Customer : In services involvement of customers is much more than in products. For exa, coffee machines provide services in which each individual has to use machine.

4) Evaluation is tougher: Evaluation of different services becomes tougher as it differs in quality and the number of customers is maximum.

5) Absence of Inventories: In case of services production and consumption of services happens at the same time. This means that there is no presence of rawmaterial to provide the service. For exa, in a hospital, a doctor renders his service only when a patient is admitted. The equipment, medicines and the doctor might be there. But the treatment begins only when there is a patient to get the service.

It is important to understand the difference between a good and service so that service operations can be performed on time by using appropriate tools and methods. A patient can get good service if the hospital staffs know the difference between the good and service. It's necessary to know which item is tangible and intangible so that we can measure the weight of each item. We must know the ownership of which item is transferrable so that we can own the products which we have bought.