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Difference Between Goods and Services

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Difference Between Goods and Service Marketing

In economics as well as business communications, goods and services are most commonly pronounced in the same breath. These are offered by the businesses to the consumers to provide utility and satisfy their needs and wants. Currently, the success of a company lies in the combination of superlative features and quality of goods and customer oriented services. Having said that, ‘Goods’ are the physical objects that the company offers while ‘Services’ is an activity of performing work for others.

Below is a compare and contrast selling goods to selling services chart for you to properly understand the difference between goods and service marketing.


Distinguish Between Goods and Services

Basic Terms

Goods      

Services

Meaning

Refers to products which can be seen, stored and touched.

Refers benefits and facilities offered by other people

Nature

Tangible

Intangible

Transfer of ownership

Yes

No

Separable

Yes

No

Assessment

Very easy and simple

Complicated

Return

Goods can be returned

Cannot be returned back

Variability

Identical

Diversified

Storage

Stored for future reference

Cannot be stored

Production and Consumption

There is a time lag between the production and consumption of goods.

Tend to occur at the same time

 

Examples

Refrigerator, Television, Books, bags and bottles

Mobile / Internet Service, insurance, transport, banking, postal and communication services


Difference Between Products and Services

Below are the main pointers that explain the difference between goods and services while having to compare and contrast goods and services.

  • Product is created whereas services are conducted

  • Goods are the material objects that the consumers are ready to buy for a price. Services are the facilities, benefits provided by the other persons.

  • Products are tangible and homogeneous in nature while services are intangible and heterogeneous

  • Goods are tangible items meaning that they can be seen or touched whereas services are intangible items i.e. they cannot be seen, moved or touched

  • Products refers to physical objects that entail production whereas services are more of processes

  • Products can be returned but services once offered cannot once be returned

  • The quality of products can be computed while services cannot

  • Goods can be transferred from one individual to another while services ownership cannot be transferred.

  • Goods can be stored for future use while services cannot be stored

  • Goods can be standardized or customized while services can be personalized

  • Goods are nonperishable while services are perishable

  • Goods are manufactured, traded, and consumed whereas services are produced and consumed simultaneously.


Similarities Between Goods and Services

  • Both goods and services have position choice

  • Have a similar design layout and production amenities

  • Both have process availability

  • Both considers the use of technology

  • There is an issue of quality in both

  • Both are objected at customer satisfaction

  • Both consist of a production capacity

Usually, companies keep a stock of goods with themselves to fulfill an urgent need for goods. It also keeps a track of the quantity of goods at the starting and the end. On the contrary, services are delivered according to the request of the customer itself. In short, the production of services is based on the customer’s demand. Both are subjected to taxes like Value Added Tax (VAT) are imposed on goods while service tax on services offered.

Sometimes products offered by the businesses in such a way that it‘s difficult to segregate products and services like in the case of a hotel, you pay for the food you eat and also for the add-on services of the chef, waiters, watchman and so on.

FAQs on Difference Between Goods and Services

1. What are Goods?

Answer: Goods or products are described as the tangible consumable products, commodities, articles, that are offered by the businesses to the customers in exchange for money. Goods are the products that are traded on the market. They are the tangible object that consists of physical characteristics, i.e. size, shape, weight, appearance, etc. Goods are capable of satiating human wants by offering them utility. Some items are designed for one-time use by the customer while some can repeatedly be used.


There is a time interval in the production, distribution, and consumption of goods. When a buyer purchases goods and pays the price, the ownership is transferred from seller to buyer. Products are produced in batches that produce identical units. Similarly, a specific product provided by the company will have the similar specifications and characteristics all across the market.


Example: Books, bags, pens, bottles, A.C, Television etc.

2. What are Services?

Answer: Services are intangible economic products which are offered by an individual on the other individual’s demand. It is an activity conducted for someone else.


They can only be delivered at a specific moment, and thus they are perishable in nature. Services lack physical identity. Services cannot be differentiated from the service provider. The point of sale is the cornerstone for consumption of services. Services can only be utilized and not owned. Let’s understand this by taking an example: If you buy a ticket to watch a match at the stadium, it doesn’t mean that you purchased the stadium; instead you have paid the price of availing services.

3. Who is the Service Receiver?

Answer: Service receiver must fully participate when the service is offered. Assessment of services is comparatively a tough task since different service providers offer the same services but charge a different amount. It may be because the method they offer services is different or the criterion they consider in valuing their services vary.


Example: Postal services, insurance, banking, communication, transport etc.