what are services description and meaning
In contrast to goods, which we can touch or handle, services are the non-physical, intangible components of our economy.
The majority of the economies of wealthy nations are based on services like banking, education, medical care, and transportation. They also represent the economies of the majority of emerging nations.
As a percentage of GDP, manufacturing and agriculture declined in the 20th century.
Today, the services industry accounts for more than two-thirds of GDP and four-fifths of employment in **OECD nations. The terms “Gross Domestic Product” (GDP) and “Organization for Economic Co-operation and Development” (OECD) are used interchangeably.
** The Organization for Economic Co-operation and Development (OECD) is a one-of-a-kind organization made up of 35 democracies with market economies. It aims to encourage sustainable development, prosperity, and economic growth.
It can be difficult to tell a service from a good at times. What, for instance, is the administration of a medication in conjunction with the diagnosis of a physical condition or disease in healthcare? In point of fact, it includes both goods (such as diagnostic and medical devices) and services (such as medical professionals’ expertise).
We are unable to store services because there is no ownership transfer when a company provides a service and the customer has paid for it. A service cannot be transported or stored by us.
They only exist while the customer consumes and the provider provides it. A haircut, for instance, is a service; A haircut cannot be transported or stored.
In point of fact, the haircut is only available while your hair is being cut.
Services are examples of intangible goods and services; There is no time lag between providing a service and using it. They cannot be transferred or stored. Things are real; Between when they are made and when they are used, there is a time gap. We are able to store things, not services. They can also be moved by us.
When you pay for a service, you get something that you can’t touch. To put it another way, you don’t get anything solid—you can’t touch it. On the other hand, a service buyer gets something they need. However, the customer does not own any tangible, immovable, or intangible assets as a result of the transaction.
The buyer’s willingness to pay is a reflection of the service’s benefits or utility. Service providers benefit customers by utilizing their expertise, inventiveness, experience, and resources.
Services, according to BusinessDictionary.com, are:
“Products intangible like accounting, banking, cleaning, consulting, education, insurance, expertise, medical care, or transportation.”
The services-to-goods continuum indicates that the majority of services cannot function without supporting goods. The same is true for products; the majority of them require services to function properly. Glenn Parry, Linda B. Newnes and Xiaoxi Huang wrote in a book titled “Service Design and Delivery”: ” Goods and services will fall somewhere on this spectrum. Instead of explicitly defining goods and services, it might be more appropriate to adopt a goods-services continuum approach. Image: (Adapted from Wikipedia) Goods versus services Each global economy is made up of a mix of goods and services.
Goods are things that we make that can be seen and touched. They are ours to handle and touch. They are bought or sold, and eventually, they are consumed. We are able to transport and store goods.
There are dozens of examples of products in your home, including your dishwasher, washing machine, microwave, and cooker. Products include furniture, computers, smartphones, televisions, and water taps.
Goods are anything that we manufacture, extract from mines, or produce through farming that you can touch.
If you open your fridge, which is a good thing, you’ll find groceries from the supermarket inside. They were made by someone in a factory or workshop and caught in a river, lake, or ocean.
Minerals were extracted from a mine by miners, and we made goods with them. Additionally, many of the items in your fridge were grown or manufactured by farmers.
Services are things that other people, businesses, or government agencies do for you.
The booking agent performs a service when you book a vacation, flight, or hotel room. That booking cannot be touched or handled because it is abstract and intangible. That reservation cannot be transported or stored.
The purpose of the government’s various public services is to serve its citizens. Ambulances, paramedics, the fire brigade, and the armed forces are all examples. In addition, healthcare, public broadcasting, urban planning, and waste management are all services in the majority of advanced economies.
According to Macro Economy Meter, services as a percentage of GDP: The global average of the Services % of GDP is 63.3 %. The Northern Mariana Islands have a Services % of GDP that is twice as high as the global average. The Northern Mariana Islands, Bermuda, Macao SAR, China, Hong Kong SAR, China, and The Bahamas have the highest Services % of GDPs (95), (94), (94), (93), and (91), respectively. Image: adapted from mecometer.com) The five I’s of services Economists frequently refer to the characteristics of each service as the 5 I’s. These characteristics include:
Intangibility: They cannot be handled or touched. They can’t be moved, stored, manufactured, mined, or farmed.
Inventory that is perishable: They cannot be stored for later use. The service is rendered by the provider and cannot be recovered.
Inseparability: The service must be provided at the time of consumption by the provider. A service, in contrast to a good, can only be provided and utilized when the provider is present.
For instance, I am unable to receive a haircut if the person who cuts my hair is absent.
like “variability” There is never a single service that is delivered exactly the same way every time. Even if the same customer requests the same service, each one is unique.
Even though the haircut I got today isn’t exactly the same as the one I got two months ago, it’s close enough.
Products, particularly those that are removed from a manufacturing line, are identical. In fact, both the first and second Snickers Bars produced in the factory on Monday morning are identical. In addition, they are identical to every other product that the factory produces on Tuesday, Wednesday, and so forth.
Involvement: A service’s provision involves both the consumer and the provider. For instance, the customer and the hairdresser are both involved in a haircut. The service cannot be performed unless both parties are present.