Introduction to Services

Marketing
The Service Economy
Chapter 01
Learning Objectives

• Differentiating Goods from Services

• Services Defined

• Characteristics of Services

• Services and Economies

• Differentiating Goods from Services

• In economics, goods and services are often pronounced in the same breath.

• These are offered by the companies to the customers to provide utility and satisfy their wants.

• At present, the business's success lies in the combination of best-quality goods and customer-
oriented services.

• ‘Goods’ are physical objects while ‘Services’ is an activity of performing work for others.

• Goods imply a tangible commodity or product, which can be delivered to the customer.

• It involves the transfer of ownership and possession from the seller to the buyer.

• On the other hand, services allude to intangible activities that are separately identifiable and
satisfy wants.
• Differentiating Goods from Services

• For further study in detail about Key Differences Between Goods and Services please
follow this link below Also:

• https://keydifferences.com/difference-between-goods-and-services.html
• Definition of Services

• Services are the intangible economic product that is provided by a person on the other
person’s demand. It is an activity carried out for someone else.

• They can only be delivered at a particular moment, and hence they are perishable in
nature.

• They lack physical identity. Services cannot be distinguished from the service provider.

• The point of sale is the basis for the consumption of services.

• Services cannot be owned but can only be utilized. You can understand this by an
example: If you buy a ticket for watching a movie at the multiplex, it doesn’t mean that
you purchased the multiplex, but you have paid the price of availing services.
Service Package
The Service Package
• Supporting Facility: The physical resources that must be in place before a service

can be sold. Examples are golf courses, ski lifts, hospitals, and airplanes.
• Facilitating Goods: The material consumed by the buyer or items provided by the

consumer. Examples are food items, legal documents, golf clubs, and medical
history.
• Information: Operations data or information that is provided by the customer to

enable efficient and customized service. Examples are patient medical records,
seats available on a flight, customer preferences, and location of the customer to
dispatch a taxi.
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The Service Package (cont.)
• Explicit Services: Benefits readily observable by the senses. The essential or

intrinsic features. Examples are the quality of the meal, attitude of the waiter, and on-
time departure.
• Implicit Services: Psychological benefits or extrinsic features that the consumer

may sense only vaguely. Examples are the privacy of the loan office and, the security
of a well-lighted parking lot.

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• Services and Economy

• What is a service economy?

• A service economy refers to an economic system where the main activity is the provision
of services rather than the production of goods.

• These services include building roads or providing medical care, catering,

accommodation, and other professional services.

• Many advanced economies are increasingly dependent on services and are shifting away
from manufacturing.
• Examples of the service economy

• Property management: management for your rental property or third-party fashion rentals

• Financial services: investment advisory and international currency exchange

• Waste management: rubbish collection and recycling services

• Insurance: services that take on another's risks for a fee

• Memberships and clubs: gym memberships and entertainment access, including theme
parks

• Design and engineering: the initial conceptualization and planning of products before
manufacturing

• Tourism: tour operations and booking (travel agents)

• Examples of the service economy

• Entertainment: films, music, video games, theater, and live shows

• Safety and security: security detail, door supervision, and emergency services

• Healthcare: medical, surgical, and cosmetic practices, Massage Services

• Education: teaching or lecturing, private tuition, and coaching

• Convenience: product and grocery delivery, taxis, and ride shares

• Professional services: hairdressing and beauty salons, garden maintenance, cleaning,

plumbing, and electrical