BUSINESS SERVICES
 

➢ Meaning

Services can be defined as the intangible activities that require personal interaction between a consumer and a service provider for them to be delivered to the consumer. The exchange of services does not involve any physical production or sale of goods.
 

➢ Types of Services

The following table presents the types of services: 

Service	Meaning	Type
Business services	Services provided by business enterprises to support their functioning and operations	Banking, warehousing
Social services	Services that are voluntarily offered by the business enterprises or individuals	Contributing towards various charity programmes  organised by NGOs
Personal services	Client specific services that are provided as per the preferences and demands of different consumers For e.g., tourism, restaurant, etc.	For e.g., tourism, restaurant, etc.

➢ Nature of Services

i. Intangible: Services cannot be seen or touched rather, can only be felt or experienced.
ii. Inseparable: Services are produced and used at the same place and at the same time. They  cannot be separated from their respective providers.
iii. Inconsistent: No specific standards can be set for providing services as the provision of services vary as per the demands and expectations of the users.
iv. Customer involvement: The involvement of service users with the service providers is a prerequisite for the customers to experience the services.
v. Inventory: Unlike products, services cannot be stored for sale in the future.  Services are provided as and when the customers demand them.
 

➢ Goods

Goods are tangible commodities that can be physically possessed.
 

➢ Difference between Services  and Goods

Basis of Difference	Services	Goods
Heterogeneous v/s Homogeneous	Services are heterogeneous and vary as per the specific requirements and demands of the users.	Goods are homogeneous.
Tangibility	Intangible	Tangible
Separability	Services cannot be separated from their providers.	Goods can be separated from their sellers.
Stock compilation	Cannot be stocked for sale in the future.	Can be stocked for sale in the future.
Involvement of customer	Involvement of customers is necessary at the time of delivery of services.	Involvement of customers is not necessary at the time of delivery of goods.
Ownership	Cannot be transferred from one customer to the other.	Can be transferred from one customer to the other.
Perishability	Non-perishable	Generally perishable
Supply adjustment	Supply cannot be adjusted easily according to demand.	Supply can be adjusted according to demand.