Lesson 3

products,
goods and
services

 Goods and Services:

Definitions and Key
Differences
Economic activity depends on the production and consumption of goods and
services, which are the two key types of economic output. While some
organizations provide goods and services, others focus on one type of output to
meet consumer demand. Learning about these two types of economic output can
help you develop a deeper understanding of how economies work.
In this
presentation I want to define goods and services and provide a list of differences
between them.
What are goods? Categories of
Goods or products is something that is
consumer goods
produced or manufactured and sold, often in
large numbers. From a market standpoint, consumer
Consumer goods are products that people buy goods are also divided into types of
for day-to-day use. In other words, they are products that are based on customer
items that people consume in their daily lives. buying habits. Consumer goods may be
It includes things like food, water, clothing, categorized into the following:
shelter, etc. The term is often used to refer to a Convenience goods
category of products that includes food, Shopping goods
clothing, furniture, and other items.
Specialty goods
They can be classified into two categories:
Unsought goods
durable and nondurable.
Durable consumer goods last longer than
three years, such as furniture, cars, and
appliances.
Nondurable consumer goods are those
that do not last long enough to be
considered durable, such as food and
clothing.
Service goods include items like auto
repairs and haircuts that are intangible
consumer goods.
 Categories of
consumer goods

1 CONVENIENCE GOODS
Convenience goods refer to consumer goods that are Player 1
available to buy regularly. This might include water,
pop, bread or detergent, and are products that are
produced to provide convenience to customers.
Convenience goods are purchased frequently,
sometimes monthly, daily or even weekly. There is little Convenience
effort in buying convenience products. Most customers
goods
will buy them because they are used to buying them
Player 2
and they are easily available when shopping at the
store.
Convenience products include the following
characteristics:
They are purchased regularly.
They are readily available.
They usually are at a low price point.
They are considered non-durable goods.

Player 3
 Categories of
consumer goods
Shopping Products
2 Shopping products are the goods that the consumer Player 1
chooses and makes the buying decision based on style,
price, quality, and stability. People don’t buy shopping
products often. In fact, they plan for it and make a
comparison among the style, quality, design, and price
of the various brands. shopping
Consumers usually spend a lot of time getting the
goods
information and making comparisons among various
Player 2
shopping products. Like clothes, washing machine,
television, air coolers, and refrigerators, etc. some of the
main types of shopping products are as follows;
Shopping products include the following characteristics:
They are purchased less frequently.
They are moderately available for purchase.
They usually come at a higher price point.
Their purchase requires some thought and
consideration. Player 3
 Categories of
consumer goods
specislity Products
3 Specialty goods refer to a collection of products that
Player 1
are intended for only a small group of buyers. They are
Speciality
usually products that cost more and are harder to find.
They are usually products that are unique and not goods
readily produced. This might include a classic car or a
piece of artwork by a favorite artist. Because they are
harder to find, consumers may not be concerned about
Unsought
price and will usually make faster buying decisions.
goods
Player 2
Unsought goods
Unsought goods are regularly available products that are only
4 targeted at a small group of people. They are products that
the customer may not necessarily be shopping for but may
consider if they come across information regarding the
product. This might include life insurance or a vehicle warranty.
Unsought goods have the following characteristics:
They are not usually considered until the product is in front
of the customer.
The product is usually unfamiliar to the customer.
Player 3
They are purchased as a one-time buy.
They usually are listed at a higher price point.
 What are services?
Service is an intangible activity, which also aims at satisfying the needs and wants of a consumer.
Services are intangible in nature, i.e., they are non-physical objects that cannot be seen, felt or
touched, but can be experienced by the consumer. The ownership of services cannot be
transferred from one person to another. They cannot be produced as they are performed as and
when required by the customer. For example, eating dinner at a restaurant, UrbanClap services at
home, etc. The three different types of services are business services, social services and personal
services. Business services are further classified as Banking, Insurance, Warehousing,
Transportation and Communication.Personal services are activities a company or individual
performs for a commission or fee. Customers often pay for these services and experience them
differently. Individuals that offer personal service often sell their skill or expertise in performing a
job. They include:Housekeeping, Dry cleaning
Social services are activities a provider may perform to achieve and promote social well-being.
These services benefit every individual, and customers often pay for them through taxes. Non-
profit organizations may also fund these services. Social services include:
Education
Animal welfare
Health

 Difference between
Goods and Services
The basic differences between goods and services are mentioned below:
1. Goods are the material items that the customers are ready to purchase for a price. Services are the
amenities, benefits or facilities provided by the other persons.
2. Goods are tangible items i.e. they can be seen or touched whereas services are intangible items.
3. When the buyer purchases the goods by paying the consideration, the ownership of goods moves
from the seller to the buyer. Conversely, the ownership of services is non-transferable.
4. The evaluation of services is difficult because every service provider has a different approach of
carrying out services, so it is hard to judge whose services are better than the other as compared to
goods.
5. Goods can be returned to or exchanged with the seller, but it is not possible to return or exchange
services, once they are provided.
6. Goods can be distinguished from the seller. On the other hand, services and service provider are
inseparable.
7. A particular product will remain same regarding physical characteristics and specifications, but
services can never remain same.
8. Goods can be stored for future use, but services are time bound, i.e. if not availed in the given time,
then it cannot be stored.
9. First of all the goods are produced, then they are traded and finally consumed, whereas services are
produced and consumed at the same time.