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