A service, in the economic sphere, is the action or set of activities aimed at satisfying a specific customer need, providing an immaterial and personalized product.

It is said that a service is heterogeneous because, taking into account different factors, they rarely coincide with each other and are usually designed and carried out in attention to each client individually. In other words, there are no mass production chains as there are in the manufacture of goods.

On the other hand, since the services are mainly intangible or non-material (we will delve into this later), a consumer cannot own them. A clear example of this type would be customer service, common in large brands.

Ultimately, the meaning of service is as broad as it is important. Therefore, we are going to see their characteristics.

Characteristics of the services

The most important characteristics of the services are the following:

  • Intangibles: They cannot be seen or touched. They are not like a good that we touch, we use, we keep.
  • Indivisibles: Although service packages can be purchased separately, there is a minimum indivisible unit. When we go to a hotel, we are paying for a service. We could even pay by the hour, but that's the service. We cannot have half a body inside the hotel and half a body outside.
  • Heterogeneous: They are very diverse and varied. That is what we meant by the breadth of its meaning. We can find services related to consulting, banking, accounting, hospitality or leisure.
  • Cannot be preserved: As a general rule, services cannot be stored. In this sense, service provision and consumption are simultaneous. For example, if a waiter serves us in a restaurant (service sector), we cannot store that service or save it. For example, a plane ticket with a certain date (unless we change the date), if we do not use it, it is lost. That plane no longer travels that day at that same time. I may do it another day, but not right then.

All the features of the services are interrelated.

Difference between a good and a service

There are several differences between goods and services. The main one is that the good can be tangible or intangible, but the service can only be intangible. For example, a tangible good is a car (it can be touched) and an intangible good is a computer program (it cannot be touched).

However, although services may have a tangible part, in general, they are intangible. For example, when we buy a train ticket or when we go to a bar for a snack.

Regarding the origin of the services, this can be of a public or private nature, depending on which sector of the economy administers it. That is to say, it is not the same that a particular service is offered by a common and private company to that of the State or some official Administration. In certain cases, it is also possible that there is a mixed model and that the service is offered jointly by the public and private sectors.

The services sector includes a large number of possibilities in the economic reality, including administration, transport, hotels, gastronomy or financial services. Other professionals in the field of health, education or domestic workers also fall within this concept.

The conditions related to each service are commonly stipulated and defined in a contract or invoice, making clear the guidelines or costs of carrying out the same and informing the client of them at all times. In addition, it is quite common the existence of continuous attention to the consumer and the availability for questions or doubts about the product.

Tags:  derivatives markets banks 

Interesting Articles