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Marketing 5th Edition by Dhruv Grewal,Michael Levy
Edition 5ISBN: 978-1259446290Marketing 5th Edition by Dhruv Grewal,Michael Levy
Edition 5ISBN: 978-1259446290 Exercise 2
What is the difference between a good and a service When you buy a music subscription on Pandora, are you buying a good or a service Would your answer be different if you bought an MP3 album on Amazon
Explanation
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Verified
Goods and services can be majorly differentiated based on their tangibility. Goods are tangible by nature as we can touch or feel it. These are basically objects or products which need to be manufactured, stored, transported and sold in the marketplace for example, television and laptop. On the other hand, services are mostly intangible by nature, it can be individualistic or collective performance, which results in providing services to the society based on their needs. For example, a doctor and a chartered accountant are giving services. Service is experienced and cannot be touched.
Goods and services can be further differentiated as below:
Transfer of ownership : Ownership is transferred to the end consumer on buying a product, for example, buying a car, it transfers the ownership of the car to the buyer. On the other hand, buying a service does not transfer the ownership to the consumer, for example buying an airline ticket, or bus ticket will not transfer the ownership of airlines or bus to the end consumer.
Quality Difference : In case of goods or products, manufacturing is done under common standards reflecting same quality in all products. On the other hand, in case of services, it differs from time to time as a lot of manual labors are involved in providing services. For example, in a local restaurant, quality of food changes from time to time in its other branches.
Time is a critical factor: While providing services, time is an important factor but it is usually not a critical factor in case of goods. There should not be any delay caused to the service because delaying reduces the effectiveness of the service. For example, train should run on time.
Evaluation: In case of services, evaluation becomes tougher as the number of customers is high and quality varies from time to time. Products or goods can be evaluated more easily as products are manufactured in large scale following a common standard. For example, AB manufacture's shoes hold a common quality standard if it is bought from any of their branches, but in case of a restaurant, consumer cannot expect same standard of service in all of their branches.
Inseparability : It states that production and consumption of a service is inseparable. This is because in services, the consumer consumes the service at the same time when it is produced. For example, train service is availed when the passenger travels in the train. Another example could be; a consumer cannot imagine himself getting his hair cut without going to a barber or salon. There is no lag between the production and consumption of services. Consumers have the advantage that feedback can be given at the same time in case of service. On the other hand, goods are produced and consumed at different point of time. There is lag in the production and consumption of goods.
Perishable : As inventories are not involved, services are not stored or warehoused. As it is perishable it cannot be stored to be used at a later stage. Perishability causes loss to the service provider, for example, every train seats that are vacant is a loss to the railway department. Goods, on the other hand can be stored and used at a later stage.
Consumer buys a service by subscribing to music in 'P Music' provider. This is because there is no physical product involved in it which can be touched and felt. It is only the experience what the consumer gets in availing the subscription. It has got all the characteristic features of service. Moreover, subscribing to the music does not provide ownership right over the subscription. In case of 'A Online Marketer' the consumer is purchasing a product or good that is tangible. It is a physical product which can be touched, felt and stored by the consumer. The consumer becomes the ultimate owner of the product as he or she buys it.
Goods and services can be further differentiated as below:
Transfer of ownership : Ownership is transferred to the end consumer on buying a product, for example, buying a car, it transfers the ownership of the car to the buyer. On the other hand, buying a service does not transfer the ownership to the consumer, for example buying an airline ticket, or bus ticket will not transfer the ownership of airlines or bus to the end consumer.
Quality Difference : In case of goods or products, manufacturing is done under common standards reflecting same quality in all products. On the other hand, in case of services, it differs from time to time as a lot of manual labors are involved in providing services. For example, in a local restaurant, quality of food changes from time to time in its other branches.
Time is a critical factor: While providing services, time is an important factor but it is usually not a critical factor in case of goods. There should not be any delay caused to the service because delaying reduces the effectiveness of the service. For example, train should run on time.
Evaluation: In case of services, evaluation becomes tougher as the number of customers is high and quality varies from time to time. Products or goods can be evaluated more easily as products are manufactured in large scale following a common standard. For example, AB manufacture's shoes hold a common quality standard if it is bought from any of their branches, but in case of a restaurant, consumer cannot expect same standard of service in all of their branches.
Inseparability : It states that production and consumption of a service is inseparable. This is because in services, the consumer consumes the service at the same time when it is produced. For example, train service is availed when the passenger travels in the train. Another example could be; a consumer cannot imagine himself getting his hair cut without going to a barber or salon. There is no lag between the production and consumption of services. Consumers have the advantage that feedback can be given at the same time in case of service. On the other hand, goods are produced and consumed at different point of time. There is lag in the production and consumption of goods.
Perishable : As inventories are not involved, services are not stored or warehoused. As it is perishable it cannot be stored to be used at a later stage. Perishability causes loss to the service provider, for example, every train seats that are vacant is a loss to the railway department. Goods, on the other hand can be stored and used at a later stage.
Consumer buys a service by subscribing to music in 'P Music' provider. This is because there is no physical product involved in it which can be touched and felt. It is only the experience what the consumer gets in availing the subscription. It has got all the characteristic features of service. Moreover, subscribing to the music does not provide ownership right over the subscription. In case of 'A Online Marketer' the consumer is purchasing a product or good that is tangible. It is a physical product which can be touched, felt and stored by the consumer. The consumer becomes the ultimate owner of the product as he or she buys it.
Marketing 5th Edition by Dhruv Grewal,Michael Levy
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