Difference Between Goods and Services

Usually, goods and services are the results of human or nature efforts. A good is a tangible item utilized either once or repeatedly. A service is intangible. The tangibility characteristic signifies the ability to taste, smell, touch and see which is missing in services. Example of goods: book, salt, shoes etc. Services are supplied by other individuals, like; a doctor, a dentist, lawyer, etc.

Goods vs Services

Product as good

  • Tangible
  • Production and distribution separated from consumption
  • An item
  • Homogeneous
  • Core value created in factory
  • Customers usually do not take part in the production process
  • Physical/capital entry barriers
  • Capital intensiveness
  • Several output related measurements possible
  • Time disconnected through inventory
  • Can be resold
  • Can be held in stock
  • Transfer of ownership

Product as service

  • Intangible
  • Heterogeneous
  • Production, distribution and consumption concurrent processes
  • An activity or process
  • Core value created in buyer-seller interactions
  • Customers get involved in production
  • Easy entry
  • Labour intensiveness
  • Hard to measure, output is recognized by the customer
  • Tough to resell
  • Can’t be held in stock
  • No change in ownership

The video shows the differences between goods & services

Difference Between Goods and Services