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Difference Between Goods and Services

Difference Between Goods and Services

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Published by Kureshi Sana
difference between goods and service
difference between goods and service

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Published by: Kureshi Sana on Apr 02, 2013
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10/16/2013

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Difference Between Goods and Services
• Categorized under Business | Difference Between Goods and Services
 There are obvious differences between goods and services that are analyzed based on characteristics of each. A good is a tangible object used either once or repeatedly. A service is intangible. The tangibilitydifferentiator indicates the ability to touch, smell, taste and see which is absent in services. This can be adeterrent to the service receiver to gauge the quality and dependant on the service companyreputation. In the case of goods the ownership of the product is transferable from sellers to buyers,whereas in services there is no ownership involved.On the quality front, with goods it is homogeneous, once produced the quality is uniform across all lineof products. They can be separated from the seller/ provider and not dependant on the source for itsdelivery to the purchaser. With regard to service it is inseparable from the service provider andheterogeneous, where each time the service is offered it may vary in quality, output, and delivery. Itcannot be controlled and is dependant on the human effort in achieving that quality hence is variablefrom producer, customer and daily basis.Another key distinction is perishability of services and the non perishability of goods. Goods will have along storage life and are mostly non perishable. Whereas services are delivered at that moment and donot have a long life or cannot be stored for repeat use. They do not bear the advantage of shelf life as inthe case of goods like empty seats in airlines. With the production and consumption taking placesimultaneously in services, it differs from goods on simultaneity and the provisions for quality control inthe process.Both goods and services need not be driven by economic motives. Several times goods and services arelinked closely and cannot be detached. For example on purchase of a car, the good is the car but theprocessing, the provision of accessories, after sales activities are all services. It is essential to note thatthe difference between pure goods and pure services are in contrast but most goods and services exist
 
in between with a mix of both. For instance, in a restaurant, food refers to goods while the service is thewaiters offering, the ambience, the setting of tables amongst others.Summary:1. Goods are tangible, and transferable while the services are intangible and non transferable.
2. Goods are separable, and non ‘“ perishable while services are inseparable.
 3. Goods are homogeneous while services are heterogeneous.
services marketing mix
Definition
 
Aselectionof servicesdevelopedtooffercustomersachoicewithin a particularrange.  Theelementsof a servicesmarketing mixare sometimes called the seven Ps: the four Ps of the marketing mix, plus three Ps of services:participants,physicalevidence,  andprocess(of serviceassembly).
 
The service marketing mix is also known as an extended marketing mix and is an
integral part of a service blueprint design. The service marketing mix consists of 7 P’s ascompared to the 4 P’s of a product marketing mix. Simply said, the service marketing
mix assumes the service as a product itself. However it adds 3
more P’s which are
required for optimum service delivery.
The product marketing mix consists of the 4 P’s which are Product,
 Pricing,Promotions
 
and Placement. These are discussed in my article on product marketing mix
 
the 4 P’s.
 
 
The extended service marketing mix places 3 further P’s which include People, Process
and Physical evidence. All of these factors are necessary for optimum service delivery.Let us discuss the same in further detail.
Product
 
The product in service marketing mix is intangible in nature. Like physicalproducts such as a soap or a detergent, service products cannot be measured. Tourismindustry or the education industry can be an excellent example. At the same time serviceproducts are heterogenous, perishable and cannot beowned.The service product thus
 
has to be designed with care. Generally service blue printing is done to define the serviceproduct. For example
a restaurant blue print will be prepared before establishing arestaurant business. This service blue print defines exactly how the product (in this casethe restaurant) is going to be.
Place -
Place in case of services determine where is the service product going to belocated. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly asoftware company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area.
Promotion
 
Promotions have become a critical factor in the service marketing mix.Services are easy to be duplicated and hence it is generally the brand which sets a serviceapart from its counterpart. You will find a lot of banks and telecom companiespromoting themselves rigorously. Why is that? It is because competition in this servicesector is generally high and promotions is necessary to survive. Thus banks, ITcompanies, and dotcoms place themselves above the rest by advertising or promotions.
Pricing
 
Pricing in case of services is rather more difficult than in case of products. If  you were a restaurant owner, you can price people only for the food you are serving. Butthen who will pay for the nice ambience you have built up for your customers? Who willpay for the band you have for music? Thus these elements have to be taken intoconsideration while costing. Generally service pricing involves taking into considerationlabor, material cost and overhead costs. By adding a profit mark up you get your finalservice pricing. You can also read about pricing strategies. 
 
Here on we start towards the extended service marketing mix.
People
 
People is one of the elements of service marketing mix. People define aservice. If you have an IT company, your software engineers define you. If you have arestaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of servicemarketing, people can make or break an organization. Thus many companies nowadaysare involved into specially getting their staff trained in interpersonal skills and customer

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