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Goods and services Service-Goods continuum In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax.
We satisfy our needs and wants by buying goods and services. Goods are items you can see and touch, such as a book, a pen, salt, shoes, hats, a folder etc. Services are provided for you by other people, such as; a doctor, a lawn mower worker, a dentist, haircut and eating in restaurants. The service-goods continuum
The dichotomy between physical goods and intangible services should not be given too much credence; these are not discrete categories. Most business theorists see a continuum with pure service on one terminal point and pure commodity good on the other terminal point. Most products fall between these two extremes. For example, a restaurant provides a physical good (prepared food), but also provides services in the form of ambiance, the setting and clearing of the table, etc. And although some utilities actually deliver physical goods & services; like water utilities which actually deliver water — utilities are usually treated as services.
In business, people sometimes talk about the marketing of products and services. This is clearly tautological - services are products. Marketers must draw on the same set of principles and skills to market all products, whether they are apples, oranges or haircuts. Like economists, marketers too view goods and services as two ends of a continuum. Goods and services are tangible and intangible goods that are produced and purchased in order to fulfill the needs and desires of consumers. Most countries base their economy on the production and consumption of both physical goods and intangible services that people at home and abroad are willing to purchase. In many cases, both the services and the goods are offered simultaneously. Goods are simply any physical or tangible products that can be seen and touched. Some goods are quickly consumed and must be replaced by like or similar products on a regular basis. Food is one example of goods that are quickly consumed and must be acquired repeatedly. Other forms of goods are more long-term in nature, and may last for years or even decades. Furniture, cutlery, and houses are examples of durable goods that are intended to satisfy consumers for extended periods of time. Services are intangible support that is provided to the consumer in some manner. A physician provides healthcare support or services. Telephone companies provide communications services such as local calling ability, long distance calling, and other features that enhance the electronic communication process. Banks provide a range of financial services to customers, ranging from basic and checking accounts to investment opportunities. Often, goods and services are presented as a unified package, providing a well-rounded and attractive option for the consumer. For example, a restaurant offers food, which is easily identified as goods. At the same time, the food is prepared for the consumer, and brought to the table by a server; thus, the goods are complemented with service. Communication companies may offer some type of equipment at no extra charge, provided the customer commits to using their services for a certain period of time, clearly another marriage of goods and services. |
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