This document summarizes how services differ from goods and how they can be classified. It outlines six ways that services can be classified, such as by equipment versus people-based delivery or for-profit versus non-profit objectives. The key differences between services and physical goods are discussed as well, noting that services are intangible, inseparable, can vary in quality, and are perishable if not provided at the right place and time. The document was prepared by Kartik Singla as part of an internship.

1. Chapter 12:
Designing and managing

2. How do we define and
classify services, and how
do they differ from goods?
By:
Kartik Singla
Indian Institute of
Technology(BHU), Varanasi

3. A service is any act of
performance one party can
offer to another
that is intangible and does
not result in the ownership of
anything.

4. Government sector services
(Police)
Private Nonprofit sector services
(colleges)
Business sector services
(companies)
Manufacturing sector services
(accountants)

5. Services can be
classified on the basis of:
1.
Equipment based
People based
Manual or automatic

6. 2.
Different processes
of delivery
Different type
of restaurant
services

7. Presence or absence of
client
3.

8. Needs4.
Personal need
Business
need

9. Objectives5.
Profit
Non profit

10. Ownership6.
Private
Public

11. Differences between
products and services

12. Physical products
can be touched,
But
Services are
Intangible i.e. they
cannot be seen, tasted
or felt before they are
bought.”

13. Physical products are manufactured
and consumed later,
But
Services are
Inseparable
i.e. they are
produced and
consumed
simultaneously.

14. Physical products
are of the same type
if they belong to the
same category,
But
Services have high
Variability i.e.
their quality depends
highly on the
provider.

15. Physical
products can
be stored,
But
Services are
Perishable
i.e. they need to be
provided at the
right place and time
to right people.

17. “These slides were prepared by
‘Kartik Singla’
as a part of an internship done under
‘Prof. Sameer Mathur’
(www.IIMInternship.com).”
Disclaimer