Difference Between Goods and Services, Essay Example

Businesses may sell goods or services only or they may sell both. In fact, there are few instances in which a sale of good is not accompanied by a provision of service at the time of purchase or at a later date. Thus, it is important to understand the differences between goods and services because customers today have higher incomes and equally high expectations.

One of the main differences between goods and services is that goods are tangible in nature and can be touched while the service is intangible in nature (Brown). For example, tablet device is a good because it is tangible in nature and can be held by the customer. In contrast, provision of information by the sales clerk to the customer is service because it is intangible in nature. Another major difference between goods and services is that while goods can be stored for future consumption or use, the service cannot be and has to be consumed or experienced at the point of provision (Bateman, 2010). If a customer buys apples, he can either consume apples immediately or store them in refrigerator for future use. On the other hand, a service like a haircut from the barber cannot be stored to be experienced at a later date. The haircut has to take place in the presence of the service provider which is barber in this case and at the point of sale.

Another distinguishing characteristic between goods and services is that human contact is not important in sale of goods but services often involve customer contact in some form whether in person or through digital technology. If one is feeling a craving for hamburger, he may send a friend to purchase the hamburger which is a good. But on the other hand, if one needs an advice from financial advisor, he/she may go in person to meet the advisor or personally contact the advisor over the phone or through email. Goods and services also vary according to degree of customization. The potential for customization is far greater in the provision of services which are often labor-intensive and require individual attention.

References

Bateman, M. (2010, December 11). Understanding the Differences between Goods and Services. Retrieved January 9, 2014, from http://www.insidebusiness360.com/index.php/understanding-the-differences-between-goods-and-services-7150/

Brown, A. (n.d.). Chapter 11. Retrieved January 9, 2014, from http://www.udel.edu/alex/chapt11.html#services